Reference no: EM131318773
Fantastik corporation experiences that demands for its product increase rapidly. the comapny considers possible plant expansion of its production facilities. The costs of plant expansion is $800000. the expansion will increase after tax annual income by $55000 for 10 years. The cost of expansion will be depreciated by over 10 year periods on straight line depreciation method with a salvage value of zero. The firms discount rate is 12%.
A. How much is the annual cash inflow from the expansion project?
B. Calculate the NPV of the project
C. What is the payback period of this project?
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