The Lunch Counter is expanding and expects operating cash flows of $49,500 a year for nine years as a result. This expansion requires $36,500 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $2,200 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 15.6 percent

Respuesta :

Zviko

Answer:

$2,000

Explanation:

the net present value of this expansion project at a required rate of return of 15.6 percent

Answer:

$193,132.81

Explanation:

NPV = −$36,500 − 2,200 + $49,500{[1 − (1/1.1569)]/.156} + $2,200/1.1569

NPV = $193,132.81

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