Question
In: Finance
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.536 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $352,800. The project requires an initial investment in net working capital of $504,000. The project is estimated to generate $4,032,000 in annual sales, with costs of $1,612,800. The tax rate is 22 percent and the required return on the project is 14 percent.
a) What is the project's Year 0 net cash flow?
b) What is the project's Year 1 net cash flow?
c) What is the project's Year 2 net cash flow?
d) What is the project's Year 3 net cash flow?
e) What is the NPV?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $4.0 million.
The fixed asset falls into the 3-year MACRS class (MACRS Table) and
will have a market value of $310,800 after 3 years. The project
requires an initial investment in net working capital of $444,000.
The project is estimated to generate $3,552,000 in annual sales,
with costs of $1,420,800. The tax rate is 22 percent and the
required return on the project...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $1.944 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$151,200. The project requires an initial investment in net working
capital of $216,000. The project is estimated to generate
$1,728,000 in annual sales, with costs of $691,200. The tax rate is
22 percent and the required return...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $3.2 million.
The fixed asset falls into the 3-year MACRS class (MACRS Table) and
will have a market value of $247,800 after 3 years. The project
requires an initial investment in net working capital of $354,000.
The project is estimated to generate $2,832,000 in annual sales,
with costs of $1,132,800. The tax rate is 22 percent and the
required return on the project...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $4.59 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$357,000. The project requires an initial investment in net working
capital of $510,000. The project is estimated to generate
$4,080,000 in annual sales, with costs of $1,632,000. The tax rate
is 22 percent and the required return...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $4.1 million.
The fixed asset falls into the 3-year MACRS class (MACRS Table) and
will have a market value of $315,000 after 3 years. The project
requires an initial investment in net working capital of $450,000.
The project is estimated to generate $3,600,000 in annual sales,
with costs of $1,440,000. The tax rate is 22 percent and the
required return on the project...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $5.13 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$399,000. The project requires an initial investment in net working
capital of $570,000. The project is estimated to generate
$4,560,000 in annual sales, with costs of $1,824,000. The tax rate
is 25 percent and the required return...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $2.16 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$168,000. The project requires an initial investment in net working
capital of $240,000. The project is estimated to generate
$1,920,000 in annual sales, with costs of $768,000. The tax rate is
22 percent and the required return...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $2.97 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$231,000. The project requires an initial investment in net working
capital of $330,000. The project is estimated to generate
$2,640,000 in annual sales, with costs of $1,056,000. The tax rate
is 24 percent and the required return...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $3.564 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$277,200. The project requires an initial investment in net working
capital of $396,000. The project is estimated to generate
$3,168,000 in annual sales, with costs of $1,267,200. The tax rate
is 24 percent and the required return...
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 3-year expansion project
that requires an initial fixed asset investment of $4.968 million.
The fixed asset will be depreciated straight-line to zero over its
3-year tax life, after which time it will have a market value of
$386,400. The project requires an initial investment in net working
capital of $552,000. The project is estimated to generate
$4,416,000 in annual sales, with costs of $1,766,400. The tax rate
is 24 percent and the required return...
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