Question: Orange Valley Shipping is considering a project that would last for 3 years and have a cost of capital of 6.79 percent. The relevant level

 Orange Valley Shipping is considering a project that would last for

Orange Valley Shipping is considering a project that would last for 3 years and have a cost of capital of 6.79 percent. The relevant level of networking capital for the project is expected to be 20.000 dollars immediately (at year 0); 8,000 dollars in 1 year: 38,000 dollars in 2 years; and 0 dollars in 3 years. Relevant expected operating cash flows and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. What is the net present value of this project? Time 0 Year 1 Year 2 Year 3 0 73,000 44,000 55,000 Pperating cash flows (in dollars) Cash flows from capital spending (in dollars) -125,000 0 0 4,000 Number

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!