Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing...
Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $25,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Blossom will recover these changes in working capital at the end of the project 14 years later. Assume the appropriate discount rate is 12 percent. What are the present values of the relevant investment cash flows?
Homework Answers
INVESTMENT IN WORKING CAPITAL = 10000 +25000 + 25000 - 5000 = 55000
THE ABOVE AMOUNT RECOVERED AT THE END OF 14 YEARS
SO PRESENT VALUE = WORKING CAPITAL/(1+r)^n = 55000/(1+0.12)^14 = 11254.09 (rounded to 2 decimals)
Answer : 11254.09 (Thumbs up please)
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Blossom, Inc., is considering investing in a new production line
for eye drops. Other than investing...
Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing...
Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $33,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Blossom will recover these changes in working capital at the end of the project 9 years later. Assume the appropriate discount rate is 10percent. What...
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Sheridan, Inc., is considering investing in a new production line for eye drops. Other than investing...
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Sheridan, Inc., is considering investing in a new production line for eye drops. Other than investing...
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Problem 11.19 (Solution Video) Blossom, Inc., is considering Investing in a new production line for eye...
Problem 11.19 (Solution Video) Blossom, Inc., is considering Investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $33,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project, Blossom will recover these changes in working capital at the end of the project 9 years later. Assume the appropriate discount...
Problem 10.18 Healthy Potions, Inc., is considering investing in a new production line for eye drops....
Problem 10.18
Healthy Potions, Inc., is considering investing in a new
production line for eye drops. Other than investing in the
equipment, the company needs to increase its cash and cash
equivalents by $10,000, increase the level of inventory by $46,000,
increase accounts receivable by $25,000, and increase accounts
payable by $5,000 at the beginning of the project. Healthy Potions
will recover these changes in working capital at the end of the
project 9 years later. Assume the appropriate discount...
Problem 10.18 Healthy Potions, Inc., is considering investing in a new production line for eye drops....
Problem 10.18
Healthy Potions, Inc., is considering investing in a new production
line for eye drops. Other than investing in the equipment, the
company needs to increase its cash and cash equivalents by $10,000,
increase the level of inventory by $46,000, increase accounts
receivable by $25,000, and increase accounts payable by $5,000 at
the beginning of the project. Healthy Potions will recover these
changes in working capital at the end of the project 9 years later.
Assume the appropriate discount...
Question 6 --12 View Policies Current Attempt in Progress Blossom, Inc., is considering investing in a...
Question 6 --12 View Policies Current Attempt in Progress Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $25,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Blossom will recover these changes in working capital at the end of the project 14 years...
No title
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Sheridan, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $58,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Sheridan will recover these changes in working capital at the end of the project 14 years later. Assume the appropriate discount rate is 15 percent....
Problem 11.19 (Solution Video) Blossom, Inc., is considering Investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $33,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project, Blossom will recover these changes in working capital at the end of the project 9 years later. Assume the appropriate discount...
Problem 10.18
Healthy Potions, Inc., is considering investing in a new
production line for eye drops. Other than investing in the
equipment, the company needs to increase its cash and cash
equivalents by $10,000, increase the level of inventory by $46,000,
increase accounts receivable by $25,000, and increase accounts
payable by $5,000 at the beginning of the project. Healthy Potions
will recover these changes in working capital at the end of the
project 9 years later. Assume the appropriate discount...
Problem 10.18
Healthy Potions, Inc., is considering investing in a new production
line for eye drops. Other than investing in the equipment, the
company needs to increase its cash and cash equivalents by $10,000,
increase the level of inventory by $46,000, increase accounts
receivable by $25,000, and increase accounts payable by $5,000 at
the beginning of the project. Healthy Potions will recover these
changes in working capital at the end of the project 9 years later.
Assume the appropriate discount...
Question 6 --12 View Policies Current Attempt in Progress Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $25,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Blossom will recover these changes in working capital at the end of the project 14 years...
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