The following are projections for year 0 and year 1 of a business project: Year 0
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Question:
The following are projections for year 0 and year 1 of a business project:
Year | 0 | 1 |
Revenue | 100 | |
Cost of Goods Sold | 50 | |
SG&A | 30 | |
Depreciation | 10 | |
Capital expenditure | 90 | 40 |
Balance sheet (levels): | ||
Inventory | 40 | 60 |
Accounts payable | 10 | 20 |
If you expect that after year 1, free cash flows will grow indefinitely at 3% per year and the cost of capital for this investment is 8%, what is the NPV of the project?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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