If a new project is undertaken, the following items of the balance sheet are expected to change
Question:
If a new project is undertaken, the following items of the balance sheet are expected to change due to the project as follows (thousands of dollars):
For instance, in year 3 accounts receivable are expected to be $460,000 larger than today.
a. What is the incremental level of OWC at the end of each year?
b. What is the economic impact of these changes of OWC on the NPV of the project?
Transcribed Image Text:
Year 1 Year 2 Year 3 Year 4 Accounts receivable 0 290 460 380 Accounts payable 140 280 240 200 Inventory 50 200 400 -100 Minimum cash 0 290 460 380
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Related Book For
Practical Finance For Operations And Supply Chain Management
ISBN: 9780262043595
1st Edition
Authors: Alejandro Serrano, Spyros D. Lekkakos, James B. Rice
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