Question

Winter Tyme, Inc., produces coats and jackets for the Seattle market. The company is considering a...

Winter Tyme, Inc., produces coats and jackets for the Seattle market. The company is considering a new 3-year expansion project into the Portland market. The expansion requires an initial investment of $1.458 million in new plant and equipment. These assets will be depreciated straight-line to zero over its 3-year tax life, after which time the assets can be sold for $113,400. The expansion also requires an initial investment in net working capital of $162,000, but this investment will be recovered at the end of the project's life. The project is estimated to generate $1,296,000 in annual sales, with costs of $518,400. The tax rate is 33 percent and the required return on the project is 12 percent.

What is the NPV?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.916 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 $226,800. The project requires an initial investment in net working capital of $324,000. The project is estimated to generate $2,592,000 in annual sales, with costs of $1,036,800. The tax rate is 31 percent and the required...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $928725. The fixed asset will be depreciated straight-line to 49027 over its 3-year tax life, after which time it will have a market value of $116318. The project requires an initial investment in net working capital of $43283. The project is estimated to generate $178575 in annual sales, with costs of $119733. The tax rate is 0.33 and the required return on...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2,338,197. 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 $2,093,051 in annual sales, with costs of $1,748,698. If the tax rate is 0.28 , what is the OCF for this project?
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $760,833. The fixed asset will be depreciated straight-line to 28,916 over its 3-year tax life, after which time it will have a market value of $139,909. The project requires an initial investment in net working capital of $47,049. The project is estimated to generate $168,205 in annual sales, with costs of $83,134. The tax rate is 0.22 and the required return on...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $918,010. The fixed asset will be depreciated straight-line to 56,208 over its 3-year tax life, after which time it will have a market value of $124,620. The project requires an initial investment in net working capital of $58,280. The project is estimated to generate $237,369 in annual sales, with costs of $155,599. The tax rate is 0.21 and the required return on...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.4 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $189,000 after 3 years. The project requires an initial investment in net working capital of $270,000. The project is estimated to generate $2,160,000 in annual sales, with costs of $864,000. The tax rate is 35 percent and the required return on the...
Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed...
Down Under Boomerang, 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. 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 is 12 percent. The project requires an initial investment in net working capital of $330,000, and the fixed asset will have...
1. Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South...
1. Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden ools. The company bought some land 7 years ago for $5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $9.8 million. The company wants to build its new manufacturing plant on this...
Phone Home, Inc. is considering a new 4-year expansion project that requires an initial fixed asset...
Phone Home, Inc. is considering a new 4-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will have a market value of $225,000. The project requires an initial investment in net working capital of $330,000, all of which will be recovered at the end of the project. The project is estimated to generate $2,640,000 in annual sales, with...
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.52 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life and is estimated to have a market value of $294584 at the end of the project. The project is estimated to generate $2146553 in annual sales, with costs of $809789. The project requires an initial investment in net working capital of $360133. If the tax rate is...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT