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    Net Present Value

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    Please help doing 3 things:

    a. - computing the incremental net income of the investment for each year

    b - Compute the incremental cash flow of the investment for each year, and

    c - calculate the NPV of the project if the discount rate is 12%

    The information has been attached.

    year 0 year 1 year 2 year 3 year 4
    Investment 10000
    revenue 7000 7000 7000 7000
    op costs 2000 2000 2000 2000
    depreciation 2500 2500 2500 2500
    net working capital spending 200 250 300 200

    Thank you!

    © BrainMass Inc. brainmass.com June 3, 2020, 10:02 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/compute-incremental-net-income-cash-flow-npv-211840

    Attachments

    Solution Preview

    Please see the attached file fully formatted solution.

    Adjusting entries

    Date Particulars Debit Credit
    $ $
    1 31-Jan Debtors a/c or Receivable Dr 875
    Revenue a/c 875
    (being Andy wright rendered services
    but the revenue not yet recorded)

    2 31-Jan Utility expense a/c Dr 520
    To utility expense payable a/c 520
    (being utility expenses
    incurrend ...

    Solution Summary

    The solution assists with computing the incremental net income, cash flow and NPV.

    $2.19

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