Question
Your company is investigating a project that will produce skateboards for the next 5 years for the Hungarian Olympic team. You estimate the cost of
Your company is investigating a project that will produce skateboards for the next 5 years for the Hungarian Olympic team. You estimate the cost of the needed equipment to produce the skateboards is $140,000, and the equipment will have an after-tax salvage value of $25,000. The accounting department and production operations department have estimated that the annual Operating Cash Flow generated by the project will be $68,000, and that the company must invest $14,000 into Net Working Capital immediately. This investment in NWC, however, will be recovered at the end of the project. What is the NPV of the project given that your firm's marginal tax rate is 25% and the discount rate for the project is 15%? $73,947 $227,947 $93,336 $108,336 $19,390
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