Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Cochrane Inc is considering a new three year expansion project that requires an initial fi...

Cochrane Inc is considering a new three year expansion project that requires an initial fixed asset investment of $1860000 The fixed asset will be depreciated straight line to zero over its

Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1,860,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,950,000 in annual sales, with costs of $1,060,000. Assume the tax rate is 35 percent and the required return on the project is 14 percent. What is the project?s NPV? Suppose the project requires an initial investment in net working capital of $150000 and the fixed assets will have a market value of 175000 at the end of the project. What is the projects 0 net cash flow? Year 1? Year 2? year year and what is NPV?

 

Apr 30 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions