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.
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
Step by Step Solution
3.41 Rating (164 Votes )
There are 3 Steps involved in it
Answer Year 0 1 2 3 Sales 18500000 20350000 22385000 Costs 8500000 9350000 102850... View full answer
Get step-by-step solutions from verified subject matter experts
