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What is the cash flow of the project

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Question - Belmont Steaks, Inc. is considering a new three year expansion project that will require initial fixed asset investment of 2.4 million dollars. The fixed asset will be deprecated by straight-line to zero over its three year tax life, after which it will be worthless. The project is estimated to generate 2,050,000 in annual sales, with costs of 950,000. The tax rate is 40 % and required return is 12%.

What is the cash flow of the project?

What is the NPV of the project?

If we incorporate the payback method into this analysis, would we get agency costs and enhance the precision of the answer?

Reference no: EM133085299

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