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What is the net present value for project

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Happy Treats, Inc. is considering a new 4-year dog treats project that requires an initial fixed asset investment of $2.8 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will have a market value of $231,000. The project requires an initial investment in net working capital of $330,000. The project is estimated to generate $2,550,000 in annual sales, with annual costs of $1,100,000. The tax rate is 40 percent and the required return for the project is 20 percent. What is the net present value for this project?

Reference no: EM133253199

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