What is the projects year 3 net cash flow

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Reference no: EM132000617

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $302,400 after 3 years.

The project requires an initial investment in net working capital of $432,000.

The project is estimated to generate $3,456,000 in annual sales, with costs of $1,382,400. The tax rate is 32 percent and the required return on the project is 17 percent. (Do not round your intermediate calculations.)

Required:

(a) What is the project's year 0 net cash flow?

(b) What is the project's year 1 net cash flow?

(d) What is the project's year 3 net cash flow?

(e) What is the NPV?

Reference no: EM132000617

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