Question: A project is expected to sell one million units initially at a price per unit of $18.50 and a cost per unit of $8.50. Units

  1. A project is expected to sell one million units initially at a price per unit of $18.50 and a cost per unit of $8.50. Units sold will increase by 10% each year over the projects 3 year life. Inventory each year will be equal to 20% of the next years forecasted sales, and accounts payable will be equal to 15% of cost of good sold in the current year. If the cost of capital is 12%, then what is the present value of the projects changes in net working capital over the life of the project?

    $926,412

    -$926,412

    -$7,548,409

    $0

    $7,548,409

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