Question

You are considering creating a new product line in warehouse space that originally cost you $48,997 9 years ago.  

The required machinery would cost $9,515, should last 13 years, after which could be scrapped for $852.
Net working capital would need to immediately increase by $3,687, but could return to normal levels after 13 years.
Annual sales and operating costs are expected to be $9,189 and $1,999, respectively.
9% of customers are expected to switch over from your existing product lines.
Your firm's cost of capital (WACC) is 9% and effective corporate tax rate is 37%.
Your firm uses straight line depreciation as its depreciation method.
What is this project's net present value (NPV)?   Enter your answer in decimal format to two decimal places (e.g., $1,538.72 would be entered as 1538.72).

Answer 1

SIS 368 2 machineny cost リーーーーAopee 951S85 13 8663 13 4666, 38 /Per-year 13 rh sera p Vat ue aも: machine 368

ash Leow mount Cf Pantculans der 9189. 299 mnual Sales OpesalingCes5 666'38 65a3 68 o) Taxe 37% 4109: 8 8 666.38 Cast flow oter ne Poresent value 익 cash flow Cash Flou で5 (13.202) 4539 13 90 35 759.38 1480.69 94038 u996 6 7:4869 :3a62 -13 13 NPV 940