Question: Freya Enterprises is considering a new 5-year project that will require $763,000 for new fixed assets, $180,000 for inventory, and $70,000 for accounts receivable. Short-term

Freya Enterprises is considering a new 5-year project that will require $763,000 for new fixed assets, $180,000 for inventory, and $70,000 for accounts receivable. Short-term debt is expected to increase by $120,000. The fixed assets will be depreciated straight-line to zero over the project's life. At the end of the project, the fixed assets are expected to be sold for 30 percent of their original cost, and the net working capital will return to its original level. The tax rate is 21 percent. What is the initial cost of this project?

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