Question: Marie's Fashions is considering a project that will require $2000 increase in net working capital and price of $40,000. The project has a 3-year life
Marie's Fashions is considering a project that will require $2000 increase in net working capital and price of $40,000. The project has a 3-year life depreciated according to MACRS. By the end of the project it will be sold for $25,000. Earnings before tax is $20,000 per year, operating costs will increase by $5,000 per year, corporate tax rate is 40% with cost of capital is 14%. (MACRS rates for 3-year: 33%- 45% -15%- 7%). Calculate NPV
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