Expansion project that require initial fixed asset investmet

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Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of S2.280.000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate S2.210.000 in annual sales, with costs of S 1.200.000. Assume the tax rate is 35 percent and the required return on the project is 11 percent. Required: What is the project's NPV?

Reference no: EM131070480

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