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Should the project be accepted? Lyndon Company has been offered a contract to build a bridge for the state of Michigan/ >/> The contract would
Should the project be accepted?
Lyndon Company has been offered a contract to build a bridge for the state of Michigan/ >/> The contract would expire in ten years. The projected cash flows that result from the contract are given below: Cost of equipment $500,000 Working capital needed $100,000 Net annual cash inflows $80,000 Salvage value of equipment in ten years $40,000 Working capital released $100,000 The company's required rate of return and discount rate is 12%. The working capital would be released at the end of project. What is the net present value of the project? a. $(102, 904) b. $(135, 104) c. $102, 904 d. $135, 104Step by Step Solution
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