What is the net present value for this project? PERIOD 0 1 2 3 4 EBIT $

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Question:

What is the net present value for this project?

PERIOD

01234

EBIT $

4, 000

5, 500

7, 000

9, 000

The above table illustrates earnings before interest and taxes for a capital investment project. Additional information for this project:

initial cost of the investment

=

30, 000

change in net working capital

=

5, 000 (

and all of this is recoverable at end of the project

)

erosion costs are $

1, 500,

1, 000,

and $

500

for Years

1, 2,

and

3

respectively

tax rate

= 29.0 %

WACC

= 12.5 %

depreciation

=

straight line over six years

salvage value is not an issue

Posted Date: May 13, 2024 03:24 AM

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What is the net present value for this project? PERIOD 0 1 2 3 4 EBIT $

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