Question
Your company, Dominant Retailer, Inc., is considering a project whose data are shown below.Revenue and cash operating expenses are expected to be constant over the
Your company, Dominant Retailer, Inc., is considering a project whose data are shown below.Revenue and cash operating expenses are expected to be constant over the project's 5 year expected operating life; annual sales revenue is $99,000.00 and cash operating expenses are $49,750.00.The new equipment's cost and depreciable basis is $155,000.00 and it will be depreciated by MACRS as 5 year property.The new equipment replaces older equipment that is fully depreciated but can be sold for $7,000.In addition, the new equipment requires an additional $5,000 of net operating working capital, which can be fully recovered at the end of the project.The new equipment is expected to be sold for $10,750 at the end of the project in year 5.The marginal tax rate is 20.00%.what is the NPV of the Project if Dominant Retailer's WACC is 12.75%?Enter your answer rounded to two decimal places.
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