What would be the NPV associated with this project

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Question - Your firm is considering buying a new manufacturing machine for $45,000. This machine will be good for 3 years and will allow your company to manufacture and sell 2,000 lanterns a year at a price of $18 per unit. The fixed costs associated with this project will be $10,000 per year, and the variable costs will be $5 per unit. You will be required to spend $10,000 upfront in inventory, which will be reclaimed at the end of the project. Assuming a tax rate of 30%, a required return of 15%, and a straight-line depreciation with no salvage. What would be the NPV associated with this project?

Reference no: EM132915560

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