What is the NPV of the tablet project, which is a 3-year project being evaluated by Sub Woophers, that involves Sub Woophers launching a line of speakers for tablets? The project would involve an initial investment in equipment of $170000 today. Cash flows from capital spending would be $0 in year 1, $0 in year 2, and $46000 in year 3 Operating cash flows are expected to be $-60000 in year 1, $140000 in year 2, and $150000 in year 3. The cash flow effects from the change in net working capital are expected to be $-13000 today; $7000 in 1 year; $-100000 in 2 years; and $30000 in 3 years.The tax rate is 50 percent. The cost of capital is 6.28 percent. The firm would borrow at an interest rate of 6.92 percent by receiving $170000 today & paying back $210000 in 3 years ($40,000 of interest & $170000, of principal)(answer must be rounded to a whole number).

Answer rating: 100% (QA)

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