A Project Is Expected to Create Operating Cash Flows of $22,500

question 63

Multiple Choice

A project is expected to create operating cash flows of $22,500 a year for three years. The initial cost of the fixed assets is $50,000. These assets will be worthless at the end of the project. An additional $3,000 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) $2,208.11
• B) $2,954.17
• C) $4,306.09
• D) $5,208.11
• E) $5,954.17

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