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For CFAT when I enter 8260*.5280 + 1540 I get 6059.68 not 5438.72, what am I missing? XYZ is considering a project that would last
For CFAT when I enter 8260*.5280 + 1540 I get 6059.68 not 5438.72, what am I missing?
XYZ is considering a project that would last for 3 years and have a cost of capital of 22.10 percent. The relevant level of net working capital for the project is expected to be $1,917.30 immediately (at year 0); $4,620.00 in 1 year; $13,100.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0,1,2, and 3 are presented in the following table. The tax rate is 52.80 percent. What is the net present value of this \begin{tabular}{|l|l|} \hline Where, & \\ \hline PBT & revenue - cost - Dep. \\ \hline CFAT & PBT x (1-tax\%) + Dep. \\ \hline CASP & capital spending \\ \hline CFWC & Cash flow due to working capital \\ \hline Cashflow & CFAT + CFWC + CASP \\ \hline PVF (Present Value Factor) & 1/(1+ cost of capital)^year \\ \hline PV (Present Value) & Cashflow X PVF \\ \hline NPV (Net present value) & Sum of all PV \\ \hline \end{tabular}Step by Step Solution
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