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A project will have annual operating cash flows of $30,900 for four years. At the beginning...

A project will have annual operating cash flows of $30,900 for four years. At the beginning of the project, net working capital of $103,600 will be needed. Only $17,150 of this amount will be recovered at the end. Ignoring taxes, what is the project's NPV if the required return is 6.50%?
Question 15 options: $14,029
$14,419
$14,809
$15,199
$15,588

Solutions

Expert Solution

Year Cash flow × factor@ 6.50% Present value
0 $    (103,600.00) 1.0000 $          (103,600.00)
1 $        30,900.00 0.9390 $             29,014.08
2 $        30,900.00 0.8817 $             27,243.27
3 $        30,900.00 0.8278 $             25,580.54
4 $        30,900.00 0.7773 $             24,019.28
4 $        17,150.00 0.7773 $             13,331.09
$                            -  
$                            -  
$                            -  
$                            -  
$                            -  
NPV 4.2031 $             15,588.27

Answer is $15,588

please rate.

jeff jeffy answered 1 year ago
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