ashina Enterprises is considering a new project. The project will require $307,985 for new fixed ssets, $150,121 for additional inventory, and $34,409 for additional accounts receivable. Accounts ayable are expected to increase by $81,416. Long-term debt is expected to increase by $241,168. he project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value ver the project's life. At the end of the project, the fixed assets can be sold for 20% of their original ost. The net working capital returns to its original level at the end of the project. The project is xpected to generate sales of $811,916 and costs of $685,551 yearly over the project's life. The tax te is 32%, and the required rate of return is 14%. What is the NPV of the project? Round your responses to two decimal points. Do not include the $ gn.
ashina Enterprises is considering a new project. The project will require $307,985 for new fixed ssets, $150,121 for additional inventory, and $34,409 for additional accounts receivable. Accounts ayable are expected to increase by $81,416. Long-term debt is expected to increase by $241,168. he project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value ver the project's life. At the end of the project, the fixed assets can be sold for 20% of their original ost. The net working capital returns to its original level at the end of the project. The project is xpected to generate sales of $811,916 and costs of $685,551 yearly over the project's life. The tax te is 32%, and the required rate of return is 14%. What is the NPV of the project? Round your responses to two decimal points. Do not include the $ gn.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Answer in typing
Transcribed Image Text:Ivashina Enterprises is considering a new project. The project will require $307,985 for new fixed
assets, $150,121 for additional inventory, and $34,409 for additional accounts receivable. Accounts
payable are expected to increase by $81,416. Long-term debt is expected to increase by $241,168.
The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value
over the project's life. At the end of the project, the fixed assets can be sold for 20% of their original
cost. The net working capital returns to its original level at the end of the project. The project is
expected to generate sales of $811,916 and costs of $685,551 yearly over the project's life. The tax
rate is 32%, and the required rate of return is 14%.
What is the NPV of the project? Round your responses to two decimal points. Do not include the $
sign.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education