Question: From the images below, pick the one that correctly sets up the NPV problems based on the information that is given -- for which years
From the images below, pick the one that correctly sets up the NPV problems based on the information that is given -- for which years would you need to calculate the Operating Cash Flow (OCF), the Net Capital Spending (NCS), and the change in Net Working Capital (Ch. NWC)?
GIVEN: "Party Sea" is considering a new 4-year project. The company would need to buy brand-new sailing catamarans that would be rented out over the next 4 years. These sailing catamarans would be worthless at the end of the project. Each year, catamaran rentals will generate profits. It will also be necessary to immediately set aside cash to cover any unforeseen repairs of the catamarans, and the cash reserve will be increased each year of the project life.


0 Yr 0 Yr 3 + Yr 1 + OCF Yr 2 + OCF Yr 4 + OCF OCF NCS NCS Ch. NWC Ch. NWC Ch. NWC Ch. NWC Ch. NWC Total CF, Total CF, Total CF, Total CF, Total CF. Yr 0 + Yr 1 + OCF Yr 2 + OCF Yr 3 + OCF Yr 4 + OCF NCS Ch. NWC Ch. NWC Total CF, Total CF Total CF Total CF, Total CF, O Yr 4 Yr 0 + Yr 1 + OCF Yr 2 + OCF Yr 3 + OCF OCF OCF NCS NCS NCS NCS NCS Ch. NWC Ch. NWC Ch. NWC Ch. NWC Ch. NWC Total CF, Total CF, Total CF, Total CF, Total CF
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