Need business and finance help with Cochrane, Inc.
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Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,310,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,220,000 in annual sales, with costs of $1,210,000. The project requires an initial investment in net working capital of $157,000, and the fixed asset will have a market value of $182,000 at the end of the project. Assume that the tax rate is 30 percent and the required return on the project is 11 percent. |
| Requirement 1: |
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What are the net cash flows of the project for the following years? (Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars (e.g., 1,234,567).) |
| Year | Cash Flow |
| 0 | $ |
| 1 | |
| 2 | |
| 3 | |
| Requirement 2: |
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What is the NPV of the project? (Do not round intermediate calculations.Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).Round your answer to 2 decimal places (e.g., 32.16).) |
| NPV | $ |
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