(Ignore income taxes in this problem.) Your Company is considering a project with a 6-year life. Your required rate of return is 14%. What is the ne present value of the project? Project Cost of equipment needed.now $50,000 Working capital investment needed now 65,000 Annual cash operating inflows 25,000 Salvage value of equipment in 6 years O $11,865 O ($7,755. O $47,225 $13,350.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...
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(Ignore income taxes in this problem.) Your Company is considering a
project with a 6-year life. Your required rate of return is 14%. What is the net
present value of the project?
Project
Cost of equipment needed now
$50,000
Working capital investment needed now
65,000
Annual cash operating inflows
25,000
Salvage value of equipment in 6 years
$11,865
O ($7,755.
O $47,225
$13,350.
Transcribed Image Text:(Ignore income taxes in this problem.) Your Company is considering a project with a 6-year life. Your required rate of return is 14%. What is the net present value of the project? Project Cost of equipment needed now $50,000 Working capital investment needed now 65,000 Annual cash operating inflows 25,000 Salvage value of equipment in 6 years $11,865 O ($7,755. O $47,225 $13,350.
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