ง The Fancy Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 22 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Year O $27,000 Year 1 Year 2 Year 3 Year 4 Sales revenue Operating costs $ 14,100 3,250 $ 15,700 $ 17,100 $ 13,600 3,275 4,900 3,500 Depreciation Net working capital spending 335 6,750 235 6,750 295 6,750 185 6,750 ? c. Suppose the appropriate discount rate is 11 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Answer is complete but not entirely correct. $ 22,500.43
ง The Fancy Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 22 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Year O $27,000 Year 1 Year 2 Year 3 Year 4 Sales revenue Operating costs $ 14,100 3,250 $ 15,700 $ 17,100 $ 13,600 3,275 4,900 3,500 Depreciation Net working capital spending 335 6,750 235 6,750 295 6,750 185 6,750 ? c. Suppose the appropriate discount rate is 11 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Answer is complete but not entirely correct. $ 22,500.43
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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The Fancy Manufacturing Company is considering a new investment. Financial
projections for the investment are tabulated here. The corporate tax rate is 22
percent. Assume all sales revenue is received in cash, all operating costs and income
taxes are paid in cash, and all cash flows occur at the end of the year. All net working
capital is recovered at the end of the project.
Investment
Year O
$27,000
Year 1
Year 2
Year 3
Year 4
Sales revenue
Operating costs
$ 14,100
3,250
$ 15,700
$ 17,100
$ 13,600
3,275
4,900
3,500
Depreciation
Net working capital spending
335
6,750
235
6,750
295
6,750
185
6,750
?
c. Suppose the appropriate discount rate is 11 percent. What is the NPV of the project?
(Do not round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
NPV
Answer is complete but not entirely correct.
$ 22,500.43
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