Example of an Asset Expansion Project -Basket Wonders(BW)-new basket weaving machine. -Cost $50,000 plus $20,000 for shipping and installation. -Net working capital (NWC)will rise by $5,000. -Revenues will increase by $40,000 for each of the next 4 years. -Machine to be sold (scrapped)for $10,000 at project end, -Operating costs will rise by $70,000 per four year. -BW is in the 40%tax bracket. slide 7slide 7 Example of an Asset Expansion Project Example of an Asset Expansion Project ƒBasket Wonders (BW) - new basket weaving machine. ƒCost $50,000 plus $20,000 for shipping and installation. ƒNet working capital (NWC) will rise by $5,000. ƒRevenues will increase by $40,000 for each of the next 4 years. ƒMachine to be sold (scrapped) for $10,000 at project end. ƒOperating costs will rise by $70,000 per four year. ƒBW is in the 40% tax bracket