The machine required for the project costs $1.72 million. The marketing departme

Question

The machine required for the project costs $1.72 million. The marketing department predicts that sales related to the project will be $1.13 million per year for the next five years, after which the market will cease to exist. The machine will be depreciated down to zero over its five-year economic life using the straight-line method. Cost of goods sold and operating expenses related to the project are predicted to be 23 percent of sales. Howell also needs to add net working capital of $167,000 immediately. The additional net working capital will be recovered in full at the end of the project

Explanation / Answer

Ans is NPV $513,125.27 . AM unable to post the soln excel due to Chegg issue.

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