Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A six-year project for Little Egypt, Inc. results in additional accounts receivable of $150,000, additional inventory of $50,000, and additional accounts payable of $80,000 today.
A six-year project for Little Egypt, Inc. results in additional accounts receivable of $150,000, additional inventory of $50,000, and additional accounts payable of $80,000 today. What is the change in the NPV of a project solely due to the additional net working capital (NWC) needs? Assume a 14% discount rate, and the recovery of net working capital at the end of the project. A) a decrease of $34,606 B) a decrease of $42,670 C) a decrease of $120,000 D) a decrease of $58,689 Also, answer D: a decrease of $58,689 is incorrect.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started