Purchase Solution

NPV of project

Not what you're looking for?

Ask Custom Question

Year 0 Year 1 Year 2 Year 3 Year 4
Initial investment $16,000 --- --- --- ---
Sales revenue $7,500 $7,500 $7,500 $7,500
Operating costs 2,000 2,000 2,000 2,000
Depreciation 4,000 4,000 4,000 4,000
Net working capital 300 350 300 250 ?(200 not sure)
Cash flow from operations 1500 1500 1500 1500

NPV = -16,000+1500/1.12+1500/1.122+1500/1.123+1500/1.124

NPV of project if discount rate is 12 percent

Corporate tax rate is 34%. All sales revenue received in cash; all operating expenses and income taxes are paid in cash; all cash flows occur at end of year. All net working capital is recovered at the end of the project.

Purchase this Solution

Solution Summary

The response provides the steps to calculate the NPV of project.

Solution Preview

Please see the attached file.

I will provide the steps to find out the NPV:

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR ...

Purchase this Solution


Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Introduction to Finance

This quiz test introductory finance topics.