Question: A company is considering adding a production line to its existing factory. This will entail an increase in inventory of $10,200, an increase in accounts
A company is considering adding a production line to its existing factory. This will entail an increase in inventory of $10,200, an increase in accounts payable of $10,900, and an increase in property, plant, and equipment of $37,000. All other accounts will remain unchanged. The change in net working capital resulting from the addition of the production line is: O -100.00 -$700 -$1,300 -$1,900 O-$2,500 QUESTION 2 A company is considering an investment project that will produce an operating cash flow of $402,000 a year for five years. The initial cash outlay for equipment will be $1,015,000. An aftertax salvage value of $69,000 for the equipment will be received at the end of the project. The project requires $86,500 of net working capital that will be fully recovered. What is the net present value of the project if the required rate of return is 14 percent? O $407,423.52 $383,391.95 $359,360.38 $335,328.81 $311,297.24
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
