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In 2005, your investment company has offered to buy Ideko for$ 53.7million. The projected improvements in working capital may or may not occur. If the
In 2005, your investment company has offered to buy Ideko for$ 53.7million. The projected improvements in working capital
may or may not occur. If the projected improvements in working capital occur, the NPV of the investment opportunity will be approximately$ 20.24
million. If the projected improvements in working capital do not occur, the NPV of the investment opportunity will be approximately
$ 10.56million. Infer the value today of the projected improvements in working capital under the assumptions that Ideko's market share will increase by
0.40 %per year and that investment, financing, and depreciation will be adjusted accordingly. Ideko's income statement and balance sheet for 2005 is shown here
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