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Suppose your firm received an order from a customer for $50,000 of Valyrian Steel Beams. You have been tasked with evaluating the effect of time

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Suppose your firm received an order from a customer for $50,000 of Valyrian Steel Beams. You have been tasked with evaluating the effect of time value of money on your firm's cash flows (on a transaction to transaction basis) using a discount rate of 7%. To fulfill this order, your firm will need to produce and transport the Valyrian Steel Beams which will take up to 50 days. Assume that the Valyrian Steel Beams cost $30,000 in COGS and that your firm is given 20 days to pay for the raw materials. Once the Valyrian Steel Beams are delivered to your customer, 40 days of trade credit will be provided to the customer. A. With the aforementioned assumptions, what is the NPV of this transaction (3 Marks)? B. Recalculate the NPV assuming that your firm reduced the time need to produce and transport the Valyrian Steel Beams to 35 days (3 Marks). C. Assuming the proposed terms in part b will lead to a perpetual daily increase/decrease in cash flow, how much value can be created/demolished (4 Marks)? Be sure to show all supporting calculations

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