Question

Greenland Corporation is considering a new investment. Financial projections for the investment are tabulated here. The...

  1. Greenland Corporation is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 25 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Suppose the appropriate discount rate is 13 percent. Determine the net working capital spending for Year 4 then calculate the NPV of the project. What is the project NPV?

    Year 0

    Year 1

    Year 2

    Year 3

    Year 4

    Investment

    $176,000

    Sales revenue

    $92,000

    $92,800

    $94,000

    $95,500

    Operating cost

    18,000

    18,600

    19,600

    21,000

    Depreciation

    44,000

    44,000

    44,000

    44,000

    Net working capital spending

    10,000

    4,000

    2,000

    1,000

    ?

    $16,984.98

    $21,584.72

    $26,933.25

    $31,477.99

    $36,068.13

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
Greenland Corporation is considering a new investment. Financial projections for the investment are tabulated here. The...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT