Question
a corporation has the following jumbled information about an investment: a. revenues in each of years 1-3: $31,000 b. year 0 initial investment : 51,000
a corporation has the following jumbled information about an investment: a. revenues in each of years 1-3: $31,000 b. year 0 initial investment : 51,000 c. inventory level : year1= 15,500 year 2= 17,100 and year 3=10,500 d. production costs : 10,300 in aech year 1-3 e. salvage value : 13,100 in year 4 f. depreciation : 100%immediate bonus depreciation g. tax rate : 21% h. customers pay with a 6 month lag. Draw up a set of cashflow forecasts if the cost of capital is 10%, what is the projects NPV? Assume that if the project generates losses, those losses can be used to offset profits elsewhere in the business.
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