What is the project year one net cash flow

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Reference no: EM131318828

Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $1,990,000 in annual sales, with costs of $703,000. The project requires an initial investment in net working capital of $210,000, and the fixed asset will have a market value of $305,000 at the end of the project.

If the tax rate is 30 percent, what is the project’s year 1 net cash flow? Year 2? Year 3?

Reference no: EM131318828

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