Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A company is considering a new project requiring an upfront fixed-asset investment of $1,000,000 with an economic life of five years. Depreciation is taken on a straight-line basis, with no expected salvage value. Net working capital required immediately is expected to be $100,000 and will be recovered in full upon the project's completion in five years.  In the pessimistic-scenario forecast, the annual sales volume is 36,300 units, while the sale price is $115 per unit with a variable cost of $77 per unit.  Annual fixed costs are estimated to $1,090,000. If the appropriate discount rate is 12.00% and the tax rate 30%, what is the project's NPV?

Options

 

-$94,297

 

-$96,715

 

-$99,133

 

-$101,551

 

-$103,969

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