Estimate what is the net present value

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Question 1: The Market Place is considering a new four-year expansion project that requires an initial fixed asset investment of $1.67 million. The fixed asset will be depreciated straight-line to zero over its four-year tax life, after which time it will have a market value of $435,000. The project requires an initial investment in net working capital of $198,000, all of which will be recovered at the end of the project. The project is estimated to generate $1,850,000 in annual sales, with costs of $1,038,000. The tax rate is 21 % and the required return for the project is 16.4 %. What is the net present value?

A) $451,180.73

B) $254,595.45

C) $358,576.22

D) $302,208.15

E) $241,334.55

Reference no: EM132553648

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