How Does Net Working Capital Affect the NPV of a 5-Year

question 68

Multiple Choice

How does net working capital affect the NPV of a 5-year project if working capital is expected to increase by $25,000 and the firm has a 15% cost of capital?

• A) NPV will increase by $9,322.
• B) NPV will increase by $12,571.
• C) NPV will decrease by $25,000.
• D) NPV will decrease by $12,571.