Question: Samira Services Corporation is considering a project with an Operating Cash Inflow of $24,500 for the first year with that amount growing 4% each year

Samira Services Corporation is considering a project with an Operating Cash Inflow of $24,500 for the first year with that amount growing 4% each year for the following four years, a timepoint zero cash outflow for Capital Investments of $90,000 with a year five Net Salvage Value of $18,000, and a Net Working Capital Investment of 11% of the following time period's OCF. With an opportunity cost of capital is 11%, the project has a Net Present Value of $16,796.40. How much would the Net Present Value improve (to the nearest dollar) if it turns out that there is no incremental change to the Net Working Capital due to the project? [Do not round interim calculations] Multiple Choice None of the above $1,177 None of the above $1,177 $3,565 $2,342 $749
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
