A project is expected to sell one million units initially at a price per unit of...
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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 project's 3 year life. Inventory each year will be equal to 20% of the next year's 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 project's changes in net working capital over the life of the project? $7,548,409 $926,412 $0 $926,412 -$7,548,409 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 project's 3 year life. Inventory each year will be equal to 20% of the next year's 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 project's changes in net working capital over the life of the project? $7,548,409 $926,412 $0 $926,412 -$7,548,409
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Answer rating: 100% (QA)
Answer Year 0 1 2 3 Sales 18500000 20350000 22385000 Costs 8500000 9350000 102850... View the full answer
Related Book For
Contemporary financial management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
Posted Date:
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