Google is considering a new three-year expansion project


Google is considering a new three-year expansion project that requires an initial fixed asset investment of $2.88 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 generate $2,140,000 in annual sales, with costs of $835,000. The tax rate is 35 percent and the required return on the project is 10 percent. What is the project's NPV? What is the IRR?  Please show all work.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Google is considering a new three-year expansion project
Reference No:- TGS02586060

Now Priced at $10 (50% Discount)

Recommended (98%)

Rated (4.3/5)