A firm is considering a new seven-year expansion project with an initial fixed asset investment...
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A firm is considering a new seven-year expansion project with an initial fixed asset investment of $3.4 million. The fixed asset will be depreciated straight-line to zero over its seven-year tax life, after which time it will be worthless. No bonus depreciation will be taken. The project is estimated to generate $2,088,000 in annual sales, with costs of $674,000. The tax rate is 21 percent and the required return is 8 percent. What is the net present value of this project? Instruction: Enter your response rounded to two decimal places
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