Summer tyme inc is considering a new 3-year expansion


Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.458 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $1,296,000 in annual sales, with costs of $518,400. If the tax rate is 30 percent and the required return on the project is 18 percent, the NPV for this project is $.

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Financial Management: Summer tyme inc is considering a new 3-year expansion
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