Determine the project year


Keiper, Inc., is considering a new three-year expansion project which needs an initial fixed asset investment of $2.64 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to make $2,060,000 in annual sales, with costs of $755,000. The project needs an initial investment in net working capital of $280,000, and fixed asset will have a market value of $270,000 at the end of the project. If the tax rate is 35 percent, determine the project's year 0 net cash flow? Year 1? Year 2? Year 3?

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Finance Basics: Determine the project year
Reference No:- TGS0875283

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