Requires initial fixed asset investment

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ACG, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $3,225,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,875,000 in annual sales, with costs of $1,620,000. The project requires an initial investment in net working capital of $200,000, and the fixed asset will have a market value of $233,000 at the end of the project. Assume that the tax rate is 21 percent. What is the ?net cash flow? in year 3?

Reference no: EM132067262

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