2. ATWOOD COMPANY Net Present Value 1 Item Investment in equipment Working Capital Investment Yearly Cash flow Yearly Cash flow Yearly Cash flow Yearly Cash flow Salvage Value of Equipment Release of working capital Net present value Amount of Year(s) Cash Flows Now $ (100,000) Now (40,000) (110,000) 2 (50,000) 3 30,000 4 through 12 80,000 12 10,000 12 40,000 20% PV of Factor Cash Flows 1.000 $ (100,000) 1.000 (40,000) 0.833 (91,630) 0.694 (34,700) 0.579 17,370 2.333 186,640 0.112 1,120 0.112 4,480 $ (56,720) Correct! Present value factor for 12 periods Present value factor for 3 periods Present value factor for 9 periods, starting 4 in future