Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.79 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 $2,110,000 in annual sales, with costs of $805,000. The tax rate is 35 percent and the required return on the project is 12 percent. What is the project's NPV? (Round your answer to 2 decimal places. (e.g., 32.16)) NPV
Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.79 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 $2,110,000 in annual sales, with costs of $805,000. The tax rate is 35 percent and the required return on the project is 12 percent. What is the project's NPV? (Round your answer to 2 decimal places. (e.g., 32.16)) NPV
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 4P
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![Keiper, Inc., is considering a new three-year expansion project that requires an initial
fixed asset investment of $2.79 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 $2,110,000 in annual sales, with costs of $805,000. The tax rate is
35 percent and the required return on the project is 12 percent. What is the project's
NPV? (Round your answer to 2 decimal places. (e.g., 32.16))
NPV](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F29fda27d-c277-4de8-befb-9c5b8b2d228a%2Fdebf495c-3c92-41b7-bd13-b28467e3fe8e%2Fbzd1iwr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Keiper, Inc., is considering a new three-year expansion project that requires an initial
fixed asset investment of $2.79 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 $2,110,000 in annual sales, with costs of $805,000. The tax rate is
35 percent and the required return on the project is 12 percent. What is the project's
NPV? (Round your answer to 2 decimal places. (e.g., 32.16))
NPV
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