ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The...

  

Transcribed Image Text:

ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $813,100.00 work cell. Further, it will cost the firm $55,000.00 to get the work cell delivered and installed. The work cell will be straight-line depreciated to zero with a 20-year useful life. The project will require new employees to be trained at a cost of $62,300.00. The project will also use a piece of equipment the firm already owns. The equipment has been fully depreciated, but has a market value of $7,100.00. Finally, the firm will invest $10,900.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $905,000.00 with expenses estimated at 36.00% of sales. Net working capital will be held constant throughout the project. The tax rate is 38.00%. The work cell is estimated to have a market value of $463,000.00 at the end of the fourth year. The firm expects to reclaim 85.00% of the final NWC position. The cost of capital is 12.00%. What is the NPV the project if we end the project after 4 years? Submit Answer format: Currency: Round to: 2 decimal places. ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $813,100.00 work cell. Further, it will cost the firm $55,000.00 to get the work cell delivered and installed. The work cell will be straight-line depreciated to zero with a 20-year useful life. The project will require new employees to be trained at a cost of $62,300.00. The project will also use a piece of equipment the firm already owns. The equipment has been fully depreciated, but has a market value of $7,100.00. Finally, the firm will invest $10,900.00 in net working capital to ensure the project has sufficient resources to be successful. The project will generate annual sales of $905,000.00 with expenses estimated at 36.00% of sales. Net working capital will be held constant throughout the project. The tax rate is 38.00%. The work cell is estimated to have a market value of $463,000.00 at the end of the fourth year. The firm expects to reclaim 85.00% of the final NWC position. The cost of capital is 12.00%. What is the NPV the project if we end the project after 4 years? Submit Answer format: Currency: Round to: 2 decimal places.