The Following Data Concern an Investment Project The Working Capital Will Be Released for Use Elsewhere at r

question 136

Essay

The following data concern an investment project:

$\begin{array} { l r } \text { Investment in Equipment } & \$ 16,000 \\\text { Net Annual Cash Inflows } & \$ 3,600 \\\text { Working Capital Required } & \$ 4,500 \\\text { Salvage Value of the Equipment } & \$ 2,000 \\\text { Life of the Project } & 12 \text { years } \\\text { Discount Rate } & 14 \%\end{array}$

The working capital will be released for use elsewhere at the conclusion of the project. (Ignore income taxes in this problem.)

Required:

Calculate the project's net present value.

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Definitions:

Distributed Points

A method used for allocating resources or rewards across different options or recipients based on predefined criteria or contributions.

Job Evaluation System

A systematic process for determining the relative worth or value of a job in an organization to establish fair compensation levels.

Point Method

A technique used in job evaluation that involves assigning point values to job elements to assess their relative worth.

Job Evaluation System

A method used to determine the value and pay grade of positions within an organization based on their responsibilities and qualifications.