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M4rF-8t Company is considering an investment project that has the following information available: Initial investment Annual cost savings Repair needed in four years Working capital
M4rF-8t Company is considering an investment project that has the following information available: Initial investment Annual cost savings Repair needed in four years Working capital needed now Life of project Cost of capital Income tax rate $175,000 $ 97,000 $ 26,000 $ 49,000 7 years 14% 30% Assume the working capital needed now will be released for investment elsewhere at the end of the project. Calculate the net present value of this investment project. To answer this question use the present value table factors given below. No credit will be awarded for this question using a means other than the table factors given below to answer this question. Factors from the present value of a lump sum table for: i = 14% n = 3 0.675 n = 6 n = 4 e. 590 n = 5 2.519 n = 7 0.399 0.456 Factors from the present value of an annuity table for: i = 14% n = 3 n = 6 n = 7 n = 4 2.914 n = 5 3.433 2.327 3.889 4.280
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