Clippers inc is considering indertaking an ivestment in new, Ask an Expert

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Clippers Inc. is considering indertaking an ivestment in new machinry. The initial cost/ investment is $2.4milion. The forecast fiures for this 3 year project are as follows (Assumption: sales and costs wll growth at 5% per year)

-Year 1 expected sales: $8milion

-Year 1 expected costs: $6milion

-Depreciation: straight line basis-$8000000/yr

-Tax rate: 35%

-Discount Rate: 6%

Calculate the projected Cash Flow from the new marchinery and the Net present Value. Based on your claculations is it a good investment, and why? Please show your work/ calculations.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92174605

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