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Year MACRS 3-year 1 33.33% 2 44.45% 3 14.81% 4 7.41% Your firm is considering a new three year project that requires an initial investment
Year MACRS 3-year 1 33.33% 2 44.45% 3 14.81% 4 7.41% Your firm is considering a new three year project that requires an initial investment of $2.1 million. The fixed asset falls into the three-year MACRS class (schedule shown above). The project is estimated to generate cash flows of $2.15 million in annual sales with costs of $1.14 million per year. The relevant tax rate is 35% and the firm requires a 14% return. What is the NPV of this project and should it be accepted
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