Oo oo Which of the following is not a common mistake regarding the measurement of working capital when forecasting a project's cash flows? Forgetting that working capital is recovered at the end of the project. Forgetting that working capital is measured as current liabilities minus current assets. Forgetting about working capital entirely. Forgetting that working capital may change during the life of the project. Kronlund Corp. is considering buying a new machine, which would save on labor costs over its life of 4 years. The machine costs $150,000 and will be depreciated straight-line over 4 years to a salvage value of $27,000, at which point the machine will be sold at the salvage value. The machine will save the company $77,000 a year in labor costs (pre-tax) but will require a one-time increase in working capital, mainly machine supplies, of $14,000 at time t=0 (which is recoverable in the last year of the project). The firm's marginal tax rate is 31%, and the opportunity cost of capital is 7%. What is the NPV of the project? Note that this problem is similar to the Lily Copies in the lecture notes; I recommend doing this problem in Excel, although that's not required. (Answer in dollars, but without the dollar sign) Type your