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In: Finance
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.2 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $403,200 after 3 years. The project requires an initial investment in net working capital of $576,000. The project is estimated to generate $4,608,000 in annual sales, with costs of $1,843,200. The tax rate is 35 percent and the required return on the project is 16 percent. (Do not round your intermediate calculations.) (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
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
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The fixed asset falls into the 3-year MACRS class (MACRS Table) and
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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project
that requires an initial fixed asset investment of $5.2 million.
The fixed asset falls into the 3-year MACRS class (MACRS Table) and
will have a market value of $403,200 after 3 years. The project
requires an initial investment in net working capital of $576,000.
The project is estimated to generate $4,608,000 in annual sales,
with costs of $1,843,200. The tax rate is 35 percent and the
required return on the...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project
that requires an initial fixed asset investment of $6.4 million.
The fixed asset falls into the 3-year MACRS class (MACRS Table) and
will have a market value of $499,800 after 3 years. The project
requires an initial investment in net working capital of $714,000.
The project is estimated to generate $5,712,000 in annual sales,
with costs of $2,284,800. The tax rate is 33 percent and the
required return on the...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
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$289,800. The project requires an initial investment in net working
capital of $414,000. The project is estimated to generate
$3,312,000 in annual sales, with costs of $1,324,800. The tax rate
is 30 percent and the required...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
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that requires an initial fixed asset investment of $6.1 million.
The fixed asset falls into the 3-year MACRS class (MACRS Table) and
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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
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The fixed asset will be depreciated straight-line to zero over its
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$436,800. The project requires an initial investment in net working
capital of $624,000. The project is estimated to generate
$4,992,000 in annual sales, with costs of $1,996,800. The tax rate
is 33 percent and the required...
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