Question: Upstate Scientific Gauges management is considering an expansion to its plant in Rochester, New York The firm's financial analysts have already prepared the following components
Upstate Scientific Gauges management is considering an expansion to its plant in Rochester, New York The firm's financial analysts have already prepared the following components of the annual cash flows expected from the project. The project requires a $4,250 investment in new fixed assets which is expected to result in an after tax disposal cash flow of $380 at the end of the project. An investment in Net Working Capital of $290 is also required, but this investment will be recaptured at the end of the project as the inventory is sold off. The firm's WACC = 10%. Your task is to complete the project analysis using the partially completed data table below. What is the NPV of the Upstate Scientific Gauges' project? Year 0 1 2 3 4 $1.750 $1,950 $2.400 $2,700 1. Incremental Operating Cash Flows 1. Net Working Capital Cash Flows II. Fixed Asset Cash Flows Select one: a $2.450 b. 5 3.053 c. $ 2,767 d. $ 3,306 e. none of the above
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