Capital Budgeting
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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.)
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Solution Summary
The solution explains how to calculate the NPV of a capital budgeting project.
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