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In: Finance
Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed...
Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $1.6 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $121,800 after 3 years. The project requires an initial investment in net working capital of $174,000. The project is estimated to generate $1,392,000 in annual sales, with costs of $556,800. The tax rate is 31 percent and the required return on the project is 11 percent. (Do not round your intermediate calculations.) Required:
(a) What is the project's year 0 net cash flow?
(b) What is the project's year 1 net cash flow? 741,605 Correct
(c) What is the project's year 2 net cash flow? 796,760 Correct
(d) What is the project's year 3 net cash flow?
(e) What is the NPV?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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