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1. a. Company A is contemplating building a new plant. The company anticipates that the plant will require an initial investment of $4,701,335 in net
1. a. Company A is contemplating building a new plant. The company anticipates that the plant will require an initial investment of $4,701,335 in net working capital today. The plant will last 10 years, at which point the full investment in net working capital will be recovered. Given an annual discount rate of 6.06%, what is the net present value of this working capital investment? b. Company A is currently cash-constrained and must make a decision about whether to delay paying one of its suppliers or taking out a loan. They owe the supplier $18,808, and they can borrow the money from Bank B, which has offered to lend the firm $18,808 for 2 months at an APR of 17% (compounded). The loan has a 2.61% loan origination fee. What would be the cost for Company A if they decide to borrow from Bank B
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