Question
In: Finance
8. Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset...
8. Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.052 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 $159,600. The project requires an initial investment in net working capital of $228,000. The project is estimated to generate $1,824,000 in annual sales, with costs of $729,600. The tax rate is 23 percent and the required return on the project is 13 percent.
What is the project's Year 0 net cash flow?
What is the project's Year 1 net cash flow?
What is the project's Year 2 net cash flow?
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What is the project's Year 3 net cash flow? What is the NPV? |
9. Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.0 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $155,400 after 3 years. The project requires an initial investment in net working capital of $222,000. The project is estimated to generate $1,776,000 in annual sales, with costs of $710,400. The tax rate is 24 percent and the required return on the project is 8 percent.
What is the project's year 0 net cash flow?
What is the project's year 1 net cash flow?
What is the project's year 2 net cash flow?
What is the project's year 3 net cash flow?
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...
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