Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $57,000 per year for 7 years. At the beginning of the project, inventory will decrease by $17,600, accounts receivables will increase by $21,800, and accounts payable will increase by $15,600. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $255,000. The equipment will be depreciated straight-line to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating an aftertax cash flow of $52,000. What is the net present value of this project given a required return of 10.2 percent? Multiple Choice $52,418 $63,408 $52,653 $50,364 $60,349
Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $57,000 per year for 7 years. At the beginning of the project, inventory will decrease by $17,600, accounts receivables will increase by $21,800, and accounts payable will increase by $15,600. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $255,000. The equipment will be
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$52,418
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$63,408
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$52,653
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$50,364
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$60,349
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