Question

**Delia Landscaping is considering a new 4-year project.
The necessary fixed assets will cost $197,000 and be depreciated on
a 3-year MACRS and have no salvage value. The MACRS percentages
each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41
percent, respectively. The project will have annual sales of
$134,000, variable costs of $36,100, and fixed costs of $12,900.
The project will also require net working capital of $3,500 that
will be returned at the end of the project. The company has a tax
rate of 40 percent and the project's required return is 8 percent.
What is the net present value of this project?**

Answer #1

Delia Landscaping is considering a new 4-year project. The
necessary fixed assets will cost $189,000 and be depreciated on a
3-year MACRS and have no salvage value. The MACRS percentages each
year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41
percent, respectively. The project will have annual sales of
$126,000, variable costs of $33,700, and fixed costs of $12,700.
The project will also require net working capital of $3,300 that
will be returned at the end of the project....

Delia Landscaping is considering a new 4-year project. The
necessary fixed assets will cost $159,000 and be depreciated on a
3-year MACRS and have no salvage value. The MACRS percentages each
year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41
percent, respectively. The project will have annual sales of
$96,000, variable costs of $27,350, and fixed costs of $11,950. The
project will also require net working capital of $2,550 that will
be returned at the end of the project....

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