Question
Florida Corporation is considering a project with an Operating Cash Inflow of $24,500 for the first year with that amount growing 4% each year for
Florida Corporation is considering a project with an Operating Cash Inflow of $24,500 for the first year with that amount growing 4% each year for the following three years, a timepoint zero cash outflow for Capital Investments of $90,000 with a year four Net Salvage Value of $18,000, and a Net Working Capital Investment of 11% of the following time periods OCF. The opportunity cost of capital is 11%.
How much would the Net Present Value improve (to the nearest dollar) if the NWC investment rate was two-thirds the original projected rate? [Do not round interim calculations]
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