Question: Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.62 million. The fixed asset will be


Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.62 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $126,000. The project requires an initial investment in net working capital of $180,000. The project is estimated to generate $1,440,000 in annual sales, with costs of $576,000. The tax rate is 31 percent and the required return on the project is 11 percent. Required: (a)What is the project's year 0 net cash flow? (Click to select)e (b)What is the project's year 1 net cash flow? (Click to select) e (c)What is the project's year 2 net cash flow? (Click to select) # (d)What is the project's year 3 net cash flow? (Click to select) e (e)What is the NPV? (Click to select) )
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