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What is the npv for project

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U-MARKET is considering an online shopping project that will require $120,000 in fixed assets and require another $25,000 in net working capital at the initial of the project. At the second year and the third year, due to a more efficient operation, U-MARKET can free up $2,500 and $2,800 in net working capital for this project, respectively. However, in the fourth year, due to some emerging orders, U-MARKET require another $3,000 in net working capital for this project.

The project is expected to produce sales of $100,000 with associated costs of $70,000 per year. The project has a 5-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 35%.

What is the NPV for this project at a 10% discount rate?

Reference no: EM132516249

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