Question
A project requires $1.08 million of new equipment that will be depreciated straight-line to zero over the projects 4-year life. The equipment is expected to
A project requires $1.08 million of new equipment that will be depreciated straight-line to zero over the projects 4-year life. The equipment is expected to be sold at the end of the project for 33 percent of its original cost. Net working capital equal to 12 percent of sales is required and will be recouped at the end of the project. Annual sales are projected at $487,500 with annual costs of $302,400. What is the recovery amount attributable to net working capital at the end of the project? Multiple Choice $25,555 $22,212 $40,100 $58,500 $42,550
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