Soylent Green is considering a new three-year expansion project to try a new product line...

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Accounting

Soylent Green is considering a new three-year expansion project to try a new product line in its cookie business. The initial outlay in fixed assets is $2.7 million and will be depreciated straight-line to zero over its three year tax life. There is an additional investment in net working capital of $300,000. After the 3 years the company will shut down operations and scrap the remaining assets for $210,000. Yearly sales and COGS will be $2,080,000 and $775,000 respectively. Assume that the cost of equity is 12% and the tax rate 35%. Calculate the projects NPV.
Question 14Answer
a.
$104,622.30
b.
$93,930.22
c.
$1,163,250.0
d.
$102,589.04
e.
Problem cant be calculated with information given.

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