Question
Working capital and capital budgeting . Working capital investment is 25% of the anticipated first year sales for Wallys Waffle House. The first-year sales are
Working capital and capital budgeting. Working capital investment is 25% of the anticipated first year sales for Wallys Waffle House. The first-year sales are currently projected at $4,300,000. The incremental cash flow (not including working capital investment) is
Initial cash flow = $13,700,000 outflow Cash flow years 1 through 10 = $2,850,000
What is the internal rate of return of the ten-year project with working capital factored into the cash flow? What is the net present value at a 15% weighted average cost of capital? What is the maximum investment in working capital for an acceptable project with a 15% weighted average cost of capital?
Show the table 0-10 years,cash flow, rate, pv
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