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Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial...

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Finance

Halloween Costumes Unlimited is considering a new 3-year store expansion project that requires an initial fixed asset investment of $3.5 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $273,000 after 3 years. The project requires an initial investment in net working capital of $390,000. The project is estimated to generate $3,120,000 in annual sales, with costs of $1,248,000. The tax rate is 34 percent and the required return on the project is 16 percent. (Do not round your intermediate calculations.)

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