Explore BrainMass

Capital Budgeting

5.) Foxglove Corp. is faced with an investment project. The following information is associated with this project:

(see chart in attached file)

The project involves an initial investment of $100,000 in equipment that falls in the 3-year MACRS class and has an estimated salvage value of $15,000. In addition, the company expects an initial increase in net operating working capital of $5,000 which will be recovered in year 4. The cost of capital for the project is 12%. What is the project's net present value? (Round the final answer to the nearest whole dollar.)

© BrainMass Inc. brainmass.com August 16, 2018, 8:09 am ad1c9bdddf


Solution Summary

The solution explains how to calculate the NPV of a capital budgeting project.