Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $201,000 and be depreciated on a 3-year MACRS and hav no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $138,000, variable costs of $37,300, and fixed costs of $13,000. The project will also require net working capital of $3,600 that wil be returned at the end of the project. The company has a tax rate of 23 percent and the project's required return is 10 percent. What is the net present walue of this project? Multiple Choice $44,506 $51,532
Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $201,000 and be depreciated on a 3-year MACRS and hav no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $138,000, variable costs of $37,300, and fixed costs of $13,000. The project will also require net working capital of $3,600 that wil be returned at the end of the project. The company has a tax rate of 23 percent and the project's required return is 10 percent. What is the net present walue of this project? Multiple Choice $44,506 $51,532
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 17P
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