What is the net present value for project

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Bentley Mews is considering a new 4-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be sold. Assume it will be sold for $231,000, its estimated market value at the end of four years. The project requires an initial investment in net working capital of $330,000, all of which will be recovered at the end of the project. The project is estimated to generate $2,640,000 in annual sales, with costs of $1,056,000. The tax rate is 30 percent and the required return for the project is 11.5 percent. What is the net present value for this project?

Reference no: EM133056046

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