Question
Your company is considering a 4-year expansion project that requires an initial fixed asset investment of $162,000. The fixed asset will be depreciated straight-line to
Your company is considering a 4-year expansion project that requires an initial fixed asset investment of $162,000. The fixed asset will be depreciated straight-line to zero over its 4-year life. The project is estimated to generate $150,000 in annual sales, with costs of $73,000. The project requires an initial investment in net working capital of $13,000, and the fixed asset will be sold for $10,000 at the end of the project. The tax rate is 25%, and the required return is 11%. Find the NPV of the project. Round your answer to the nearest dollar, for example 10789.
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