Suppose that Bloopers customers paid their bills with an average 3-month delay (instead of 2 months) and that Bloopers inventories were 20% rather than 15% of next years 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		Spreadsheet Name
Initial Investment	17,500	Investment
Salvage value	3,500	Salvage
Initial revenue	23,400	Initial_rev
Initial expenses	13,000	Intial_exp
Inflation rate	0.05	Inflation
Discount rate	0.12	Disc_rate
Acct receiv. as % of sales	1/4	A_R
Inven. as % of expenses	0.2	Inv_pct
Tax rate	0.35	Tax_rate

a. Would project NPV be higher or lower than that in the Blooper spreadsheet?

higher

lower

b. Calculate Bloopers working capital in each year of its project. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

Year	Working Capital
0
1
2
3
4
5
6

c. What is the change in project NPV? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

The NPV_________(Increases or Decreases) from $4,223 to__________.