Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.536 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $352,800. The project requires an initial investment in net working capital of $504,000. The project is estimated to generate $4,032,000 in annual sales, with costs of $1,612,800. The tax rate is 22 percent and the required return on the project is 18 percent. What is the project's Year 0 net cash flow? Year 0 cash flow

Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.536 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $352,800. The project requires an initial investment in net working capital of $504,000. The project is estimated to generate $4,032,000 in annual sales, with costs of $1,612,800. The tax rate is 22 percent and the required return on the project is 18 percent. What is the project's Year 0 net cash flow? Year 0 cash flow

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

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