Question: Problem 19: Prof. Gandhi has pointed out that A&Y does not need $40,000 NWC for the entire length of the project. In fact, it needs

 Problem 19: Prof. Gandhi has pointed out that A&Y does not

Problem 19: Prof. Gandhi has pointed out that A&Y does not need $40,000 NWC for the entire length of the project. In fact, it needs only $25,000 of NWC during the first 4 years of the project and $40,000 during the remaining 3 years. If A&Y follows Prof. Gandhi advice, i.e., invest only $25,000 in NWC at t=0 and add additional $15,000 to NWC at the beginning of year 5 (so that it will be available from t=4 forward) by how much is the NPV of the project increased? Problem 19: Prof. Gandhi has pointed out that A&Y does not need $40,000 NWC for the entire length of the project. In fact, it needs only $25,000 of NWC during the first 4 years of the project and $40,000 during the remaining 3 years. If A&Y follows Prof. Gandhi advice, i.e., invest only $25,000 in NWC at t=0 and add additional $15,000 to NWC at the beginning of year 5 (so that it will be available from t=4 forward) by how much is the NPV of the project increased

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