Forise Water Company drills small commercial water wells. The company is in the process of analyzing the

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Forise Water Company drills small commercial water wells. The company is in the process of analyzing the purchase of a new drill. Information on the proposal is provided below.

Initial investment

Asset = $700,000

Working capital = $ 168,000

Operations (per year for four years)

Cash receipts = $550,000

Cash expenditures = $ 240,000

Disinvestment

Salvage value of drill (existing) = $150,000

Discount rate 16%

What is the net present value of the investment? Assume there is no recovery of working capital?

Related Book For answer-question

Applied Statistics In Business And Economics

ISBN: 9780073521480

4th Edition

Authors: David Doane, Lori Seward

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Posted Date: May 14, 2023 12:00 AM

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Forise Water Company drills small commercial water wells. The company is in the process of analyzing the

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Applied Statistics In Business And Economics

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