Question 9

XYZ is considering a project that would last for 3 years and have a cost of capital of 22.70 percent. The relevant level of net working capital for the project is expected to be $1,936.90 immediately (at year 0); $4,540.00 in 1

year; $15,000.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 50.20

percent. What is the net present value of this project? .

Year 0

Year 1

Year 2

Year 3

Revenue

0.00

$13.000.00 $11.900.00 $10 500.00

Costs

0.00

$3970.00 $3.780.00 $2.100.00

Depreciation

0.00

$1.630.00 $2.400.00 $2.800.00

Cash flows from capital spending $-5,750.00 $1,390.00 $ 980.00 $3,710.00

$1561.19 (plus or minus $10)

$5999.49 (plus or minus $10)

$7957.36 (plus or minus $10)

$11771.71 (plus or minus $10)

None of the above is within $10 of the correct answer

supuede Question XYZ is considering a project that was for 3 years and have a cost of prod 22.0 percent. There wag om year $15.000.00 in 2 years and 5000 years expected to depreciation and cash flowers from dig, percent. What is the net present value of this proce? Yuwo Yeart Year 2 Years 3000 13.000 0.000000 Costs $0.00 $37000 370000 10000 Deprecanon $ 00000000000000 Cashow from conding 01 000000001000 51. Dus or min 510) 5500049 por munus 10) 57057 36 Column 101 O $1177171 intusor 5101 None of the above is within 10 of the correct