Question: Bee Corp. has been offered a four-year contract to supply the computing requirements for a local bank. Cash flow information cost of computer equipment 250,000

Bee Corp. has been offered a four-year contract to supply the computing requirements for a local bank.

Cash flow information

cost of computer equipment 250,000

working capital required 20,000

upgrading of equipment in 2 years 90,000

salvage value of equipment in 4 years 10,000

annual net cash inflow 120,000

The working capital would be released at the end of the contract Bee Corp requires a 14% rate of return.

Required: Calculate NPV using a spreadsheet.


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