Question: Hunter's Hut is considering a seven-year project that will require $854,000 for new fixed assets that will be depreciated straight line to a zero book
| Hunter's Hut is considering a seven-year project that will require $854,000 for new fixed assets that will be depreciated straight line to a zero book value over the seven years. At the end of the project, the fixed assets can be sold for 20% of the original cost. The project is expected to generate sales of $928,000 and costs of $721,000. The tax rate is 35% and the required return is 14.6%. What is the OCF for each year? What is the NPV of this project? |
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