A proposed capital project is expected to produce operating cash infl $123,000 per year for 4 years. At the beginning of the project, inventory will increase by $8,500, accounts receivable will increase by $11,300, and accounts payable will increase by $4,100. All net working capital will be recovered at the end of the project. The initial cost of fixed assets required for the project is $298,000. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. No bonus depreciation will be taken. The fixed assets will be salvaged at the end of the project, creating an aftertax cash inflow of $32,000. What is the net present value of this project given a required return of 14.1 percent? O $105,754 $76,935 O $72,097 $68,916 O $68,735

A proposed capital project is expected to produce operating cash infl $123,000 per year for 4 years. At the beginning of the project, inventory will increase by $8,500, accounts receivable will increase by $11,300, and accounts payable will increase by $4,100. All net working capital will be recovered at the end of the project. The initial cost of fixed assets required for the project is $298,000. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. No bonus depreciation will be taken. The fixed assets will be salvaged at the end of the project, creating an aftertax cash inflow of $32,000. What is the net present value of this project given a required return of 14.1 percent? O $105,754 $76,935 O $72,097 $68,916 O $68,735

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Description: A proposed capital project is expected to produce operating cash inflows of$123,000 per year for 4 years. At the beginning of the project, inventory willincrease by $8,500, accounts receivable will increase by $11,300, and accountspayable will incre

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 4P

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