Question N1 - XYZ is considering a 3-yr project. The initial outlay is $120,000, annual cash...

Question N1 - XYZ is considering a 3-yr project. The initial outlay is $120,000, annual cash flow is $50,000 and the terminal cash flow is $10,000. The required rate of return (cost of capital) is 15%. The net present value is $736.42. What if the annual cash flow increases to $57,000 instead? Re-calculate the NPV.

Question N2 - Six years ago, XYZ Company invested $51,959 in a new machinery. The investment in net working capital was $4,716 which would be recovered at the end of the project. Today, XYZ Company is selling the machinery for $24,092. Today, the book value of the machinery is $11,215. The tax rate is 26 percent. What are the terminal cash flows in Year 6?

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box

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jeff jeffy answered 2 months ago

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