Question

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

Answer 1

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

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