Question
Initial Investment: 450000 (given) *1.000 = -450000 (calculation I know how to do) Working Capital Initial: 16000 (given) *1.000 = -16000 (calculation I know how
Initial Investment: 450000 (given) *1.000 = -450000 (calculation I know how to do)
Working Capital Initial: 16000 (given) *1.000 = -16000 (calculation I know how to do)
Working Capital Return: 16000 (given) *0.751(#from discount rate chart) = 12016 (calculation I know how to do)
*Annual Cash Flow: 133000 (given) per year *2.487(DONT KNOW WHERE THIS # IS COMING FROM) = 330771 (need help with this one line)
Salvage Value at the end of the project: 6000 (given) *0.751(# from chart) = 4506 (calcuation I know how to do)
Expected life of the project: 3 years (given)
Discount Rate: 10% (given)
The problem has you find present value. However I am stuck on a number that is given in the problem and on a test or homework problem I would not know how to find it. If someone can clarify where the 2.487 comes from in the annual cash flow line it would answer my question. Thanks.
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