Question
In: Finance
Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed...
Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.3 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which it will be worthless. The project is estimated to generate $1,720,000 in annual sales, with costs of $630,000. The tax rate is 22 percent and the required return is 11 percent. What is the project’s NPV?
Solutions
Expert Solution
Solution :
The NPV of the project is = $ 189,819.47
= $ 189,819 ( when rounded off to the nearest whole number )
Please find the attached screenshot of the excel sheet containing the detailed calculation for the above solution.
jeff jeffy answered 10 months agoRelated Solutions
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