It has been mentioned that operating cash flow from the project will be $75,000 for 7 years. Some additional information on inventory has been given this will not leave affect on net present value calculation as it has been mentioned in the question that net working capital will be recovered at the end of the year. Therefore, cash flow is considered as $75,000 and rate of return is 20%.
NPV = Cash flow / (1 + r) i
= $75,000 / (1+20)7 = $195,344
1 Moscow Moldings is considering installing a new molding machine which is expected to produce operating...
Moscow Moldings is considering installing a new molding machine which is expected to produce operating cash flows of $75,000 a year for 7 years. At the beginning of the project, inventory will decrease by $15,000, accounts receivable will increase by $35,000, and accounts payable will increase by $15,000. All net working capital will be recovered at the end of the project. The initial cost of the molding machine is $280,000. The equipment will be depreciated straight-line to a zero book...
1. Moscow Moldings is considering installing a new molding machine which is expected to produce operating cash flows of $75,000 a year for 7 years. At the beginning of the project, inventory will decrease by $15,000, accounts receivable will increase by $35,000, and accounts payable will increase by $15,000. All net working capital will be recovered at the end of the project. The initial cost of the molding machine is $280,000. The equipment will be depreciated straight-line to a zero...
1. Moscow Moldings is considering installing a new molding machine which is expected to produce operating cash flows of $75,000 a year for 7 years. At the beginning of the project, inventory will decrease by $15,000, accounts receivable will increase by $35,000, and accounts payable will increase by $15,000. All net working capital will be recovered at the end of the project. The initial cost of the molding machine is $280,000. The equipment will be depreciated straight-line to a zero...
Moscow Moldings is considering installing a new molding machine which is expected to produce operating cash flows of $75,000 a year for 7 years. At the beginning of the project, inventory will decrease by $15,000, accounts receivable will increase by $35,000, and accounts payable will increase by $15,000. All net working capital will be recovered at the end of the project. The initial cost of the molding machine is $280,000. The equipment will be depreciated straight-line to a zero book...
Company A is considering installing a new molding machine which is expected to produce operating cash flows of $73,000 a year for 7 years. At the beginning of the project, inventory will decrease by $16,000, accounts receivables will increase by $21,000, and accounts payable will increase by $15,000. All net working capital will be recovered at the end of the project. The initial cost of the molding machine is $249,000. The equipment will be depreciated straight-line to zero in book...
Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $70,500 per year for 9 years. At the beginning of the project, inventory will decrease by $29,600, accounts receivables will increase by $27,800, and accounts payable will increase by $20,100. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $300,000. The...
Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $67,000 per year for 8 years. At the beginning of the project, inventory will decrease by $25,600, accounts receivables will increase by $25,800, and accounts payable will increase by $18,600. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $285,000. The...
Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $55,000 per year for 7 years. At the beginning of the project, inventory will decrease by $16,000, accounts receivables will increase by $21,000, and accounts payable will increase by $15,000. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $249,000. The...
Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $63,000 per year for 7 years. At the beginning of the project, inventory will decrease by $22,400, accounts receivables will increase by $24,200, and accounts payable will increase by $17,400. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $273,000. The...
Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $67,000 per year for 8 years. At the beginning of the project, inventory will decrease by $25,600, accounts receivables will increase by $25,800, and accounts payable will increase by $18,600. At the end of the project, net working capital will return to thelevel it was prior to undertaking the new project. The initial cost of the molding machine is $285,000. The equipment...