Question
Lin McAdam and Lola Manners, managers of the Winchester Company, do not practice capital rationing. They are considering the purchase of a new forklift to
Lin McAdam and Lola Manners, managers of the Winchester Company, do not practice capital rationing. They are considering the purchase of a new forklift to use in the warehouse. The Winchester Companys required rate of return is 13 percent. The initial investment (a negative cash flow) and the expected positive net cash flows for years 1 through 4 for the forklift project follow.
Expected Net Cash Flow Year Forklift 0 $(12,000) 1 5,000 2 4,000 3 6,000 4 2,000 Calculate the net present value for the forklift project: Enter to the nearest whole dollar.
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