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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed...

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Finance

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.9 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $147,000 after 3 years. The project requires an initial investment in net working capital of $210,000. The project is estimated to generate $1,680,000 in annual sales, with costs of $672,000. The tax rate is 34 percent and the required return on the project is 15 percent.

a.) What is the project's year 0 net cash flow?

b.) What is the project's year 1 net cash flow?

c.)What is the project's year 2 net cash flow?

d.)What is the project's year 3 net cash flow?

e.)What is the NPV?

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