Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 million. 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 $2,150,000 in annual sales, with costs of $1,140,000. Assume the tax rate is 35 percent and the required return on the project is 14 percent Required: What is the project's NPV? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Enter your answer in dollars (e.g., 1.234.567.89), not millions of dollars. Round your answer to 2 decimal places (e.g.. 32.16).)

Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 million. 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 $2,150,000 in annual sales, with costs of $1,140,000. Assume the tax rate is 35 percent and the required return on the project is 14 percent Required: What is the project's NPV? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Enter your answer in dollars (e.g., 1.234.567.89), not millions of dollars. Round your answer to 2 decimal places (e.g.. 32.16).)

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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