The following are projections for year 0 and year 1 of a business project:

 

Year	0	1
Revenue		100
Cost of Goods Sold		50
SG&A		30
Depreciation		10
Capital expenditure	90	40
Balance sheet (levels):
Inventory	40	60
Accounts payable	10	20

 

If you expect that after year 1, free cash flows will grow indefinitely at 3% per year and the cost of capital for this investment is 8%, what is the NPV of the project?

Answer rating: 100% (QA)

To calculate the net present value NPV of the project we need to find the present value of all cash ... View the full answer