Question: It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial

It is expected that net working capital will amount to 20%

It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (Year 0) investment in working capital of .2024,600$40=$196,800. Plant and equipment necessary to establish the giftware business will require an additional investment of $265,000. This investment will depreciate on the MACRS schedule over 3 years. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 30%. The discount rate is 20%. Use the MACRS depreciation schedule. a. What is the net present value of the project? Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount

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