A project is expected to create operating cash flows of $38,000 a year for four years. The initial cost of the fixed assets is $120,000. These assets will be worthless at the end of the project. An additional $7.500 of net working capital will be required throughout the project's life and is expected to be a fall recovery when the project ends. What is the project's net present value if the requir de of return is 8 percent?
A project is expected to create operating cash flows of $38,000 a year for four years. The initial cost of the fixed assets is $120,000. These assets will be worthless at the end of the project. An additional $7.500 of net working capital will be required throughout the project's life and is expected to be a fall recovery when the project ends. What is the project's net present value if the requir de of return is 8 percent?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A project is expected to create operating cash flows of $38,000 a year for four years. The initial cost of the fixed assets
is $120,000. These assets will be worthless at the end of the project. An additional $7,500 of net working capital will
be required throughout the project's life and is expected to be a full recovery when the project ends. What is the
project's not present value if the requirate of return is 8 percent?
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