You are considering creating a new product line in warehouse space that originally cost you $48,997 9 years ago.

• The required machinery would cost $9,515, should last 13 years, after which could be scrapped for $852.
• Net working capital would need to immediately increase by $3,687, but could return to normal levels after 13 years.
• Annual sales and operating costs are expected to be $9,189 and $1,999, respectively.
• 9% of customers are expected to switch over from your existing product lines.
• Your firm's cost of capital (WACC) is 9% and effective corporate tax rate is 37%.
• Your firm uses straight line depreciation as its depreciation method.

What is this project's net present value (NPV)? Enter your answer in decimal format to two decimal places (e.g., $1,538.72 would be entered as 1538.72).

Answer rating: 100% (QA)

Machinery Cost 9515 Scrap Value 853 Life 13 years Depreciation Machine costScr... View the full answer