Question: A company is considering a project with the following characteristics: Initial investment: $8,000 $2,000 Working capital required: Annual net cash flows for 4 years:

A company is considering a project with the following characteristics: Initial investment: $8,000 $2,000 Working capital required: Annual net cash flows for 4 years: $4,000 per year The working capital will be released at the end of the 4-year project. The company's discount rate is 8%. What is the Net Present Value of this project? (Use the present values tables in your packet for any present value calculations. Don't round intermediate calculations. Round your final answer to the nearest dollar.)

Step by Step Solution

★★★★★

3.38 Rating (151 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To calculate the Net Present Value NPV of the project we need to discount the cash flows including t... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

In Problem find the domain of the function and all x or y intercepts. x + 1 f(x) X - 2

Find the sum. 2

1. Given that D= zpcos o z Clm?, calculate the charge density at (1,T/4, 3) and the total charge enclosed by the cylinder of radius 1 m with - 2

A company is considering a project with the following characteristics: Initial investment: $7,000 Working capital required: $2,000 Annual net cash flows for 4 years: $3,000 per year The working...

A company is considering a project with the following characteristics: Initial investment: $ 7 , 5 0 0 Working capital required: $ 1 , 0 0 0 Annual net cash flows for 4 years: $ 5 , 0 0 0 per year...

(Ignore income taxes in this problem.) Farah Corporation has provided the following data concerning a proposed investment project: $ 760,000 8 years $ 30,000 $ 152,000 $ 108,000 Initial investment...

14. What is the expected payback period for the new machine? (2 decimal places) 15. What is the profitability index of the proposed machine if V Co. uses a discount rate of 14%% on projects of this...

Problem 24-4A (Algo) Applying net present value and profitability index LO P3 Rowan Company is considering two alternative investment projects. Each requires a $268,000 initial investment. Project A...

Rowan Company is considering two alternative investment projects. Each requires a $261,000 initial Investment. Project A is expected 0 generate net cash flows of $71,000 per year over the next six...

need help please Problem 24-4A (Algo) Applying net present value and profitability index LO P3 Rowan Company is considering two aiternative investment projects. Each requires a $263.000 initial...

Perform the numerical calculations of Example 2.7 for the values given are Figure 2-8. Plot Figures 2-8 and 2-9. Do not duplicate the solution in Appendix H; compose your own solution.

Rank the following compounds in order of increasing basicity. CH OH NH

Implementation of internal control on the components of: turf products

Terrel Manufacturing expects stable sales through the summer months of June, July, and August of $500,000 per month. The firm will make purchases of S350,000 per month during these months. Wages and...

rn 3) Consider the second order differential equation mx" = -kr ba' describing a mass spring system with damping. Suppose the mass of the object is m = 1 kg, the spring constant is k = 1/4 and...

Please propose a plan for protecting your intellectual property. In your plan, be sure to identify the different types of intellectual property that you are concerned about protecting and what steps...

Give an example of an element of a product or process design that makes ieasy to do the right thing, and/or difficult or impossible to do the wrong thing, or that immediately detects when a mistake...

Mai is putting money into a checking account. Let y represent the total amount of money in the account (in dollars). Let x represent the number of weeks Mai has been adding money. Suppose that x and...

An alternative approach to determining stability is the direct methed of Liapunov.5 Liapunov assumes the existence of a positive-definite energylike function L(x, y) with continuous first partial...

Product Verification For the given 2 ( 2 matrices A and B, show directly (by finding the product AB) that |AB| = |A| |B| 1. 2. 0 2 3 T0 07 1 2 2J 0

Repeated Roots, Long-Term Behavior: Show that in the "repeated roots" case of equation (1), the solution, which is given by x(t) = c1e-(b/2a)t + c2te-(b/2a)t , for b/2a > 0, tends toward zero as t...

A $1000 investment is made today. Calculate its maturity values for the six combinations of terms and annually compounded rates of return in the following table.

Nelson borrowed $5000 for 4 years. For the first 2 years, the interest rate on the loan was 8.4% compounded monthly. Then the rate became 7.5% compounded semiannually. What total amount was...

How much more will an investment of $10,000 be worth after 25 years if it earns 6% compounded annually instead of 5% compounded annually? Calculate the difference in dollars and as a percentage of...