Question
Alina's Cafe is expanding and expects the expansion to cause an increase in operating cash flows of $42,000 per year for seven years. This
Alina's Cafe is expanding and expects the expansion to cause an increase in operating cash flows of $42,000 per year for seven years. This expansion requires $78,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires an investment of $6,000 in net working capital at the start of the project, which will be recovered at the end of the project. What is the net present value of this expansion project at a required rate of return of 14 percent? Multiple Choice O O O -$261,711 -$98,507 $182,507 -$64,817 $98,507
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
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