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 $4.4 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $344,400 after 3 years. The project requires an initial investment in net working capital of $492,000. The project is estimated to generate $3,936,000 in annual sales, with costs of $1,574,400. The tax rate is 31 percent and the required return on the project is 10 percent. (Do not round your intermediate calculations.)

Required:
(a)	What is the project's year 0 net cash flow?
	(Click to select) -4,647,400 -4,892,000 -1,979,919 -1,875,713 -4,402,800

(b)	What is the project's year 1 net cash flow?
	(Click to select) 2,188,331 2,292,538 1,875,713 1,979,919 2,084,125

(c)	What is the project's year 2 net cash flow?
	(Click to select) 2,124,012 2,235,802 2,188,331 1,875,713 2,347,592

(d)	What is the project's year 3 net cash flow?
	(Click to select) 2,795,332 2,662,221 2,188,331 2,529,110 2,395,999

(e)	What is the NPV?
	(Click to select) 850,595.41 718,472 10,075,024 893,125 808,066

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 years ago

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