A Project Is Expected to Create Operating Cash Flows of $24,500

question 8

Multiple Choice

A project is expected to create operating cash flows of $24,500 a year for three years.The initial cost of the fixed assets is $55,000.These assets will be worthless at the end of the project.An additional $4,000 of net working capital will be required throughout the life of the project.What is the project's net present value if the required rate of return is 10%?

• A)$4,933.13
• B)$8,954.17
• C)$9,306.09
• D)$11,208.11
• E)$12,933.13

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Definitions:

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