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Instead of solving for a zero NPV as is usual in setting a bid price, the company president requires arn NPV of $100,000, so we will solve for a NPV of that amount. The NPV equation for this project rs (remember to include the NWC cash flow at the beginning of the project, and the NWC recovery at the end) NPV $100,000--$4,100,000-445,000 + 3,699,512.67-OCF(PVIFA10%,4) +[(S303750+ 445,000)/1014 Solving for the OCF, we get:

Instead of solving for a zero NPV as is usual in setting a bid price, the company president requires arn NPV of $100,000, so we will solve for a NPV of that amount. The NPV equation for this project rs (remember to include the NWC cash flow at the beginning of the project, and the NWC recovery at the end) NPV $100,000--$4,100,000-445,000 + 3,699,512.67-OCF(PVIFA10%,4) +[(S303750+ 445,000)/1014 Solving for the OCF, we get:

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
Problem 1PS
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Instead of solving for a zero NPV as is usual in setting a bid price, the company president requires arn NPV of $100,000, so we will solve for a NPV of that amount. The NPV equation for this project rs (remember to include the NWC cash flow at the beginning of the project, and the NWC recovery at the end) NPV $100,000--$4,100,000-445,000 + 3,699,512.67-OCF(PVIFA10%,4) +[(S303750+ 445,000)/1014 Solving for the OCF, we get:
Transcribed Image Text:Instead of solving for a zero NPV as is usual in setting a bid price, the company president requires arn NPV of $100,000, so we will solve for a NPV of that amount. The NPV equation for this project rs (remember to include the NWC cash flow at the beginning of the project, and the NWC recovery at the end) NPV $100,000--$4,100,000-445,000 + 3,699,512.67-OCF(PVIFA10%,4) +[(S303750+ 445,000)/1014 Solving for the OCF, we get:
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