Acme Company is expanding and expects operating cash flows of $85,000 a year for 4 years as a result. This expansion requires $240,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires a $15,000 investment in net working capital (assume NWC will be recovered at the end of the project). What is the net present value of this expansion project at a required rate of return of 15 percent?   Question 1 options:   $(3,375.49)   $(3,638.02)   $(3,750.54)   $(3,563.01)   $(3,825.55)

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
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Acme Company is expanding and expects operating cash flows of $85,000 a year for 4 years as a result. This expansion requires $240,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires a $15,000 investment in net working capital (assume NWC will be recovered at the end of the project). What is the net present value of this expansion project at a required rate of return of 15 percent?
 

Question 1 options:

 
$(3,375.49)
 
$(3,638.02)
 
$(3,750.54)
 
$(3,563.01)
 
$(3,825.55)
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