Question: QUESTION 2 XYZ is considering a project that would last for 3 years and have a cost of capital of 19.80 percent. The relevant level

 QUESTION 2 XYZ is considering a project that would last for

QUESTION 2 XYZ is considering a project that would last for 3 years and have a cost of capital of 19.80 percent. The relevant level of niet working capital for the project is expected to be $2,173.00 immediately (at year of: $5,000.00 in 1 year: 514,800.00 in 2 years and 50.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2 and 3 are presented in the following table. The tax rate is 50 70 percent What is the net present value of this project? Year 0 Year 1 Year 2 Year 3 Revono $0.00 $10,000.00 $12,000.00 $11,000.00 Costs $ 0.00 8400000 $355000 $2.000.00 Depreciation $0.00 $2,010 00 $2,200.00 $1,700.00 Cash flows from capital sponding 5 6.500 00 $1,480,00 $1,010.00 $3.020.00 57657 36 (plus or minus 510) $548003 (plus or minus 510) $10900 50(plus or minus $10) O $1280 01 plus or minus $ 10) None of the above is within $10 of the correct

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!