# In the previous problem, suppose the required return on the project is 15 percent. What is the

## Question:

In the previous problem, suppose the required return on the project is 15 percent. What is the project’s NPV?

**Data from problem 10**

Bush Boomerang, Inc., is considering a new three year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,900,000 in annual sales, with costs of $850,000. If the tax rate is 35 percent, what is the OCF for this project?

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**Related Book For**

## Fundamentals Of Corporate Finance

**ISBN:** 9780072553079

6th Edition

**Authors:** Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan