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External Financing / Net Present Value of Project

Frisch Fish Corporation expects net income next year to be $600000. Inventory and accounts receivable will have to be increased by $300000 to accommodate this sales level. Frisch will pay dividends of $400000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities?

Stone, Inc., is evaluating a project with an initial cost of $8450. Cash inflows are expected to be $1000, $1000, and $1000 in the three years over which the project will produce cash flows. If the discount rate is 13 percent, what is the net present value of the project?

Solution Summary

The solution explains two questions - one relating to the amount of external financing needed and the second relating to net present value of a project