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Williams Inc. is planning on expanding a product line. According to the project evaluation team the NPV was found to be $3,000,000. But the team
Williams Inc. is planning on expanding a product line. According to the project evaluation team the NPV was found to be $3,000,000. But the team forgot to take into account the incremental working capital the project will require. Now it is found that the incremental working capital requirement is $6,000,000. The project will last three years at which time the investment on the incremental working capital will be recovered fully (as the working capital will no longer be needed). If the cost of capital is 14%, the revised NPV for the project must be a) 54,629 285 b) 52.995,950 Od 51.158,301 d) $1.049.829
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