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| Teaching Since: | May 2017 |
| Last Sign in: | 402 Weeks Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Your company is investigating the opportunity to invest $1,800,000 in a project that will produce MP3 players for the next 5 years. The firm's marginal tax rate is 25% and the discount rate for the project is 20%.
| Â | Â |
The accounting department and production operations department have estimated the following:
| After-tax Salvage Value | $375,000 |
| Annual OCF (for 5 years) | $1,807,500 |
| Initial Investment in NWC | $120,000 |
| Â | Â |
What is the NPV of the project if the investment in NWC is recovered at the end of the project?
| Â | $3,684,461 |
| Â | $3,860,531 |
| Â | -$1,226,071 |
| Â | $3,804,461 |
| Â | $3,605,531 |
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