Considering new three-year expansion project

Assignment Help Financial Management

Reference no: EM131844997

H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,580,000. The fixed asset falls into the three-year MACRS class (MACRS Table). The project is estimated to generate $2,310,000 in annual sales, with costs of $1,300,000. The project requires an initial investment in net working capital of $166,000, and the fixed asset will have a market value of $191,000 at the end of the project. Assume that the tax rate is 30 percent and the required return on the project is 7 percent. What is the net cash flow of the project each year? (A negative answer should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year Cash Flow 0 $ 1 2 3 What is the NPV of the project? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $

Reference no: EM131844997

Questions Cloud

What type of tax rate structure does the US tax system apply : What type of tax rate structure does the U.S. tax system apply? What are the individual tax forms, and what factors are used to determine which one to use

Present the dna evidence : Once he starts lying, you then present the DNA evidence. What will you say to get him to confess?

Field of odontology when determining the predator : Bite marks are an important factor for the field of odontology when determining the "predator." Bite mark evidence are being used since the mid

Helps in a murder or homicide case : Forensic odontology is use to determines and helps in a murder or homicide case and establish an examination of the individual

Considering new three-year expansion project : H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,580,000.

What risk factors are you adding to your matrix : Create a separate new matrix that summarizes the additional risk factors for this firm launching a management consultancy or legal services line.

Create a industry and market feasibility analysis : Create aIndustry and Market Feasibility Analysis for aJanitorial Service, you should include the following Six foundational macro forces which create change.

Paragraph scenario using the questions in the outline : "Make-up" a case involving a body found in a river. Write a short one paragraph scenario using the questions in the outline.

What is the name of the forensic scientist odonotology : What is the name of the forensic scientist odonotology who helped in the case of Teddy Bundy?

User Account

All Pages