Corp is looking at the effect of change in the working capital in a project that...

Corp is looking at the effect of change in the working capital in a project that will last 5 years. the working capital will increase by $125,000 in the first year, and then increase again by $80,000 in the second year. the working capital level will remain unchanged in year 3 and 4: and will drop by $205,000 in year 5 (when the project end) what is the NPV of theses working capital cash flows in the discount rate is 15%???

can you please explain the answers with the steps ... thanks

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Expert Solution

NO EXCEL FUNCTION IS USED. JUST PRESENTED IN TABLE FORM FOR EASY UNDERSTANDING.

FIRST COLUMN SHOW INCREASE IN WORKING CAPITAL, THAT IS HOW MUCH IS INVESTED EVERY YEAR, SECOND COLUMN SHOWS TOTAL INVESTMENT IN WORKING CAPITAL. LAST COLUMN SHOWS PRESENT VALUE OF INCREASE IN WORKING CAPITAL

jeff jeffy answered 1 month ago

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