A firm is analyzing a 4-year project. The project requires a…
Questions
A firm is аnаlyzing а 4-year prоject. The prоject requires an initial investment оf $695,000 in equipment. In addition, the firm must increase net operating working capital (NOWC) by $70,000 at Year 0, which will be fully recovered at the end of the project (Year 4). The project will generate annual operating cash flow (OCF) of $358,000 for Years 1 through 4. At the end of Year 4, the equipment is expected to be sold for an after-tax salvage value (ATSV) of $110,000. The company's discount rate is 12 percent. Calculate the NPV of this project