Winter Blues, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $52

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

Winter Blues, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $52

Post by answerhappygod »

Winter Blues, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $521000. The fixed asset will be depreciated straight-line to 32000 over its 3-year tax life, after which time it will have a market value of $125000. The project requires an initial investment in net working capital of $56000. The project is estimated to generate $245000 in annual sales, with costs of $112000. The tax rate is 0.40 and the required return on the project is 0.08. What is the total cash flow in year 0?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”