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Ohio Dinning is considering a new three-year expansion project for grab-and-go that requires an initial...

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Accounting

Ohio Dinning is considering a new three-year expansion project for grab-and-go that requires an initial fixed asset investment of $1.50 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will have a market value of $332,500. No bonus depreciation will be taken. The project requires an initial investment in net working capital of $243,500, all of which will be recovered at the end of the project. The project is estimated to generate $1,634,500 in annual sales, with costs of $1,047,000. The tax rate is 21.53 percent and the required return for the project is 12.7 percent. What is the net present value? 11 Round to near integer.

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