Question: Foley Systems is considering a new investment whose data are shown below. The equipment would be depreciated on a straight-line basis over the project's 3-year
Foley Systems is considering a new investment whose data are shown below. The equipment would be depreciated on a straight-line basis over the project's 3-year life, would have a zero salvage value, and would require additional net operating working capital that would be recovered at the end of the project's life. Revenues and other operating costs are expected to be constant over the project's life. What is the project's NPV? (Hint: Cash flows from operations are constant in Years 1 to 3.) WACC Net investment in fixed assets (basis) Required net operating working capital Strnight-line depreciation rate Annual sales revenues Ammual operating costs (excl. depreciation) Tux rate 10.0" $75,000 $15.000 33 3339 $75,000 $25,000 35.096 28 O A) $28,993 B) $27,612 21 C) $23,852 24 OD) $26,297 E) $25,045
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