Question: 27) The Down Towner is considering a 4-year project that will require $164,800 for fixed assets and $42,400 for net working capital. The fixed assets

27) The Down Towner is considering a 4-year project that will require $164,800 for fixed assets and $42,400 for net working capital. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold for $37,500 (after-tax) and the net working capital will return to its original level. The project is expected to generate annual sales of $195,000 and cash-costs of $117,500. The tax rate is 21 percent and the required rate of return is 15 percent. What is the projects net present value?

Please provide excel formulas and table

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!