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Suppose that Blooper's customers paid their bills with an average 3-month delay (instead of 2 months) and that Blooper's inventories were 15% rather than
Suppose that Blooper's customers paid their bills with an average 3-month delay (instead of 2 months) and that Blooper's inventories were 15% rather than 15% of next year's expenses. Use the below Blooper spreadsheet. See SPREADSHEET 9.1 in the eBook for the baseline project evaluation and resulting NPV assuming 15% Inventory expense SPREADSHEET 9.1 Financial projections for Blooper's Magnoosium mine (dollar values in thousands) Inputs Initial Investment Salvage value Initial revenue Salvage Initial revenue 150 Spreadsheet Name Investment 201 176 Initial expenses 126 Intial expenses Inflation rate Discount rate 0.05 0.12 Acct receivable as of sales: 1/4 Inflation Discount rate AR Investment as of expenses 0.1 Inv pot Tax rate 0.21 Tax rate a. Would project NPV be higher or lower than that in the Blooper spreadsheet? b. Calculate Blooper's working capital in each year of its project. c. What is the change in project NPV? Complete this question by entering your answers in the tabs below. Required A Required B Required C Would project NPV be higher or lower than that in the Blooper spreadsheet? NPV Required A Required B >
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