In order to launch a new model rocket project, SpaceY is planning to accumulate excess inventory...

 

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In order to launch a new model rocket project, SpaceY is planning to accumulate excess inventory upfront in the first year of the project, leading to an increase in net working capital (NWC) of $20,000 in year 1. When the project is complete in year 5, the inventory will decrease by the same $20,000. If the total impact of these changes in NWC in years 1 and 5 is to NOT change the net present value (NPV) of the project, what do you know about the required return (r) for the project? In order to launch a new model rocket project, SpaceY is planning to accumulate excess inventory upfront in the first year of the project, leading to an increase in net working capital (NWC) of $20,000 in year 1. When the project is complete in year 5, the inventory will decrease by the same $20,000. If the total impact of these changes in NWC in years 1 and 5 is to NOT change the net present value (NPV) of the project, what do you know about the required return (r) for the project?