Business Finance question

FratBro23
Category:
Business & Finance
Price: $10 USD

Question description

A production project will generate an expected operating cash flow of $50,000 per year for 4 years (years 1 – 4).  Undertaking the project will require an increase in the company’s net working capital (inventory) of $10,000 today (year 0).  At the end of the project (year 4), inventory will return to the original level.  The project would cost $150,000.  The weighted average cost of capital for the firm is 9%.  Sketch a timeline (explain what amount is considered in each year of the timeline) to illustrate the relevant cash flows.  What is the net present value of this project?


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: University of Virginia
PREMIUM TUTOR
Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1819 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors