Summer Tyme, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset falls into the three-year MACRS class (MACRS Table) and will have a market value of $210,000 after three years. The project requires an initial investment in net working capital of $300,000. The project is estimated to generate $2,650,000 in annual sales, with costs of $840,000. The tax rate is 35 percent and the required return on the project is 12 percent. The net cash flow in Year 0,1,2,3 and the NPV?
Summer Tyme, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset falls into the three-year MACRS class (MACRS Table) and will have a market value of $210,000 after three years. The project requires an initial investment in net working capital of $300,000. The project is estimated to generate $2,650,000 in annual sales, with costs of $840,000. The tax rate is 35 percent and the required return on the project is 12 percent. The net cash flow in Year 0,1,2,3 and the NPV?
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