The NPV of the investment (ignoring taxation), to the nearest whole number, is:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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ABC Ltd. is considering an investment which would require the immediate purchase of a capital asset costing €400,000 and working capital of €120,000. Net inflows will be €180,000, €160,000 and €140,000 for year one, year two and year three. Working capital will increase by 20% per year in each of the first two years. All of the working capital will be turned into cash at the end of year three. The company’s cost of capital is 15%. The NPV of the investment (ignoring taxation), to the nearest whole number, is:

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