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Calculate the amount of the initial investment

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Reference no: EM132806362

Bt3RZ Company is considering an investment project that has the following information available:

Initial investment .................... ?
Annual cost savings ................... $ 63,900
Repair needed in four years ........... $ 17,500
Working capital needed now ............ $ 42,000
Life of project ....................... 7 years
Cost of capital ....................... 14%

The working capital needed now will be released for investment elsewhere at the end of the project. The net present value of this investment was calculated to be $22,976.

Problem 1: Calculate the amount of the initial investment.

Reference no: EM132806362

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