Find the net cash flows of the project each year

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Question: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,550,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,300,000 in annual sales, with costs of $1,290,000. The project requires an initial investment in net working capital of $165,000, and the fixed asset will have a market value of $190,000 at the end of the project. Assume that the tax rate is 35 percent and the required return on the project is 7 percent. What are the net cash flows of the project each year?

Reference no: EM131978953

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