Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

XYZ is considering a project that would last for 3 years and have a cost of capital of 19.70 percent. The relevant level of net

image text in transcribed

XYZ is considering a project that would last for 3 years and have a cost of capital of 19.70 percent. The relevant level of net working capital for the project is expected to be $2,190.60 immediately (at year 0); $4,590.00 in 1 year; $15,800.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 50.40 percent. What is the net present value of this project?. Year 0 $ 0.00 $ 0.00 Year 1 Year 2 Year 3 $13,500.00 $14,000.00 $11,700.00 Revenue Costs $3,960.00 $3,600.00 $3,500.00 Depreciation $ 0.00 $2,180.00 $2,290.00 $2,700.00 Cash flows from capital spending $-6,100.00 $ 480.00 $1,330.00 $4,150.00 O $2290.33 (plus or minus $10) O $7284.09 (plus or minus $10) $9635.12 (plus or minus $10) O $12897.02 (plus or minus $10) O None of the above is within $10 of the correct

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Understand Business Finance

Authors: Bob Cinnamon, Brian Helweg-Larsen

2nd Edition

0749460202, 978-0749460204

More Books

Students also viewed these Finance questions

Question

Please help me evaluate this integral. 8 2 2 v - v

Answered: 1 week ago