A finance manager estimates the following working capital needs for a new, 5-year project: 0 1 2 3 4 5 NOWC -100000 0 0 0 0 +100000 A supply chain manager looks at those numbers and feels that, properly optimized, the NOWC needs will actually be as follows: 0 1 2 3 4 5 NOWC -70000 0 0 0 0 +70000 Compute the NPV of both projections, using a rate of 10%/year as your cost of capital. (Note that since both start with a cash outflow at the beginning that is not returned until the end, each NPV you calculate will be a negative number. That does not mean that this project is a bad project; we are only looking at the NOWC portion of the project, and not including big cash inflows like the Operating Cash Flows.) By how much will the supply chain manager's projections IMPROVE the overall NPV of the project? (For example, if the NPV of the finance manager's projection is $ -20000 and the NPV of the supply chain manager's projection is $-12000, then the supply chain manager's projection improves the NPV by $8000).

What we are calculating here is the improvement of the NPV of a project that results from an optimized supply chain.

$11372.36

$4785.61

$16,235.44

$19.337.37

$23.451.81