What is the NPV of an investment with the following information: Initial investment at time t=0...

What is the NPV of an investment with the following information: Initial investment at time t=0 is $1,600,000 Life of project is 8 years Initial investment depreciated to $0 via straight-line over entire life NWC investment required = $0.00 Expected market salvage value of investment assets = $0.00 Starting 1-year from today, and remaining constant over project life: Incremental sales as a result of investment = $1,400,000 / year Incremental expenses as a result of investment = $1,000,000 / year firm' tax rate = 28% required return on investment = 12%

Expert Solution

Therefore, the NPV of the investment is $ 1,08,854.

jeff jeffy answered 2 years ago

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