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KT Enterprises Would Like to Construct and Operate a New

question 44

Essay

KT Enterprises would like to construct and operate a new ice skating rink.In addition to the capital expenditures on the rink,management estimates that the project will require an investment today of $220,000 in net working capital.The firm will recover the investment in net working capital fifteen years from today,when management anticipates closing the rink.The discount rate for this type of cash flow is 8% per year.Calculate the present value of the cost of working capital for the ice skating rink.


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The body of law derived from judicial decisions and customs, as opposed to statutes.

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Pertaining to governmental jurisdictions and activities that occur at the state or provincial rather than national level.

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The quality of being reliably true, definite, or clearly determined; an absence of doubt.

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A matter or problem that shares characteristics or is nearly identical to another.

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