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Assume a project's net operating working capital in Year 0, Year 1, Year 2, Year 3, and Year 4 are $20,000,$20,000,$20,000,$20,000 and $0. The project
Assume a project's net operating working capital in Year 0, Year 1, Year 2, Year 3, and Year 4 are $20,000,$20,000,$20,000,$20,000 and $0. The project requires to purchase a $80,000 equipment. The equipment will be linearly depreciated in 4 years to a $0 book value. The project life is 4 years with annual operating cash flow of $40,000. The salvage value of fixed assets at the end of Year 4 is $2000. Required rate of return =10%. Tax rate =40%. What is the NPV of the project? $35127 $66125 $41274 $55302
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