Question
In: Finance
X is considering a new three-year expansion project that requires an initial fixed asset investment of...
|
X is considering a new three-year expansion project that requires an initial fixed asset investment of $2.15 million. The fixed asset qualifies for 100 percent bonus depreciation. The project is estimated to generate $2.23 million in annual sales, with costs of $1.25 million. The project requires an initial investment in net working capital of $150,000, and the fixed asset will have a market value of $185,000 at the end of the project. Assume that the tax rate is 23 percent and the required return on the project is 14 percent. |
| a. |
What is the net cash flow of the project for each year? |
| b. | What is the NPV of the project? |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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