Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $866
Posted: Fri Jul 01, 2022 7:47 am
Summer Tyme, Inc., is considering a new 3-year expansion projectthat requires an initial fixed asset investment of $866,560. Thefixed asset will be depreciated straight-line to 66,498 over its3-year tax life, after which time it will have a market value of$96,360. The project requires an initial investment in net workingcapital of $54,671. The project is estimated to generate $230,123in annual sales, with costs of $150,075. The tax rate is 0.32 andthe required return on the project is 0.09. What is the aftertaxsalvage value in year 3? (Make sure you enter the number withthe appropriate +/- sign)