Question: Amalgamated Industries is considering a 4- year project. The project is expected to generate operating cash flows of $2 million, $6 million, $5 million, and
Amalgamated Industries is considering a 4- year project. The project is expected to generate operating cash flows of $2 million, $6 million, $5 million, and $3 million over the four years, respectively. It will require initial capital expenditures of $8 million dollars and an intitial investment in NWC of $2 million. The firm expects to generate a $3 million after tax salvage value from the sale of equipment when the project ends, and it expects to recover 100% of its nwc investments. Assuming the firm requires a return of 9% for projects of this risk level, what is the project's NPV
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