Summer Thyme. is considering a new 5-year expansion project that requires an initial fixed asset investment of $3.51 million. The fixed asset
will be depreciated straight-line to zero over its 5-year tax life after which it will be worthless. The project is estimated to generate
$3120000 in annual sales with costs of $1248000. The tax rate is 33 percent and the required return is 14 percent. The project requires an
initial investment in net working capital of $390000 and the fixed asset will have a market value of $273000 at the end of the project.