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A company is considering a 4-project that would require a net working capital investment of $23,000 up-front. The company has a tax rate of 30%
A company is considering a 4-project that would require a net working capital investment of $23,000 up-front. The company has a tax rate of 30% and a required return of 13%. The project is expected to generate annual pre-tax cost savings of $48,000. If you were calculating the NPV for this project, what amount would you use for the present value of net working capital (i.e. an amount that represents the present value of all cash flows related to the project's net working capital requirement) in your NPV calculation?
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