Question: Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.39 million. The fixed asset will be depreciated
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.39 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life and is estimated to have a market value of $214767 at the end of the project. The project is estimated to generate $2107871 in annual sales, with costs of $887327. The project requires an initial investment in net working capital of $399428. If the tax rate is 31 percent and the required return on the project is 12 percent, what is the project's NPV? Round final answer to the nearest dollar amount.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
