Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $3.3 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $256,200 after 3 years. The project requires an initial investment in net working capital of $366,000. The project is estimated to generate $2,928,000 in annual sales, with costs of $1,171,200. The tax rate is 34 percent and the required return on the project is 16 percent. (Do not round your intermediate calculations.)
Required:
(a) What is the project's year 0 net cash flow?
a. -3,482,700
b.-3,299,400
c.-1,456,778
d.-1,380,106
e.-3,666,000
(b) What is the project's year 1 net cash flow?
a.1,610,123
b.1,686,796
c.1,456,778
d.1,380,106
e. 1,533,451
(c) What is the project's year 2 net cash flow?
a 1,658,217
b 1,610,123
c 1,380,106
d 1,741,128
e 1,575,306
(d) What is the project's year 3 net cash flow?
a.1,846,694
b. 1,749,500
c. 1,610,123
d. 2,041,083
e. 1,943,888
(e) What is the NPV?
a. 103,557
b. 140,314
c. 133,632.55
d. 126,951
e. 7,110,045