Question: Help Please H. Cochran Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2,180,000. The fixed asset falls
H. Cochran Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2,180,000. The fixed asset falls into the three-year MACRS class (MACRS schedule). The project is estimated to generate $1,730,000 in annual sales, with costs of $636,000. The project requires an initial investment in net working capital of $290,000, and the fixed asset will have a market value of $240,000 at the end of the project. a. If the tax rate is 24 percent, what is the project's Year O net cash flow? Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and round your answers to two decimal places, e.g., 32.16.) b. If the required return is 12 percent, what is the project's NPV? (Do not round Intermediate calculations and round your answer to two decimal places, e.g., 32.16.) a. Year 0 cash flow Year 1 cash flow Year 2 cash flow Year 3 cash flow b. NPV
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