Working capital = Current Assets - Current Liabilities
Investment in Working Capital = Cash and Cash Equivalents + Inventory + Accounts Receivables - Accounts payables
= 10,000+25000+25000-5000 = $55,000
Present value = -55,000 + 55,000*PVF(12%, 14 years)
= -55,000 + 55,000*0.2046
= -$43,747
Question 6 --12 View Policies Current Attempt in Progress Blossom, Inc., is considering investing in a...
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....
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...
0/1 Jeek- Question 6 View Policies Show Attempt History Current Attempt In Progress X Your answer is incorrect. ort Carla Vista, 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 $41,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Carla Vista will recover these...
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...
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....
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 $48,000, 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 8 years later. Assume the appropriate discount rate is 10 percent....
Sandhill, 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 $23,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Sandhill will recover these changes in working capital at the end of the project 10 years later. Assume the appropriate discount rate is 8 percent....
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...
Sandhill, 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 $23,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Sandhill will recover these changes in working capital at the end of the project 10 years later. Assume the appropriate discount rate is 8 percent....