Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. hubrey home inc. is considering a new three-year e

Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed...

90.2K

Verified Solution

Question

Finance

image

Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30 percent per year), and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $2,650,000 in annual sales, with costs of $840,000. The project requires an initial investment in net working capital of $300,000 and the fixed asset will have a market value of $210,000 at the end of the project. If the tax rate is 35 percent, what is the project's year 0 net cash flow? Year 1? Year 2? Year 3? (Enter the answers in dollars. Negative answers should be indicated by a minus sign.) Years Year 0 Year 1 Year 2 Year 3 Cash Flovw If the required return is 12 percent, what is the project's NPV? (Enter the answer in dollars. Negative answer should be indicated by a minus sign. Do not round your intermediate calculations. Round the final answer to 2 decimal places.) NPV

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Advance Math
1.2K views

find all primes p such that 6 is a square mod p? please with clear hand...

Physics
1.2K views

For a particle undergoing simple harmonic motion the square of velocity v is plotted against...

Basic Math
1.2K views

5 26 Future value of an annuity In 10 years you are planning on retiring...

Statistics
1.2K views

The dot plot shows the Each dot represents 1 country 7 8 B 18 1...

Calculus
1.2K views

What is the general anti derivative of f x 3 2x 10 O F x...

Algebra
1.2K views

A 8 6 HAVAMAK 2 K AN y 2 x 4 B Identify the equation...

Accounting
1.2K views

This information relates to the Cash account in the ledger of Carla Vista Company. Balance...

Accounting
1.2K views

The following information applies to the questions displayed below.] Astro Co....

Accounting
1.2K views

Fire Corp. is considering the purchase of a new piece of equipment. The equipment costs...

Accounting
1.2K views

ch 24 Sheridan's standard quantities for 1 unit of product include...

Accounting
1.2K views

A machine with a cost of $143,000 and accumulated depreciation of $98,000 is sold for...

Finance
1.2K views

The Loughran Corporation has issued zeco-coupon corporate bonds with a five-year maturhy, livestors believe there...