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Bruno's Lunch Counter is expanding and expects operating cash flows of $26,000 a year for 4 years as a result. This expansion requires $39,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $30,000 of net working capital which will be recouped when the project ends. What is the net present value of this expansion project at a required rate of return of 16 percent? O $18,477.29 O $20,321.43 $28,288.70 O $29,416.08 O $32,409.57

Bruno's Lunch Counter is expanding and expects operating cash flows of $26,000 a year for 4 years as a result. This expansion requires $39,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $30,000 of net working capital which will be recouped when the project ends. What is the net present value of this expansion project at a required rate of return of 16 percent? O $18,477.29 O $20,321.43 $28,288.70 O $29,416.08 O $32,409.57

Essentials Of Investments
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
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Bruno's Lunch Counter is expanding and expects operating cash flows of $26,000 a year for 4 years as a result. This expansion requires $39,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $30,000 of net working capital which will be recouped when the project ends. What is the net present value of this expansion project at a required rate of return of 16 percent? O $18,477.29 O $20,321.43 $28,288.70 O $29,416.08 O $32,409.57
Transcribed Image Text:Bruno's Lunch Counter is expanding and expects operating cash flows of $26,000 a year for 4 years as a result. This expansion requires $39,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $30,000 of net working capital which will be recouped when the project ends. What is the net present value of this expansion project at a required rate of return of 16 percent? O $18,477.29 O $20,321.43 $28,288.70 O $29,416.08 O $32,409.57
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