What is net present value of this project

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Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $73,500 per year for 9 years. At the beginning of the project, inventory will decrease by $34,400, accounts receivables will increase by $30,200, and accounts payable will increase by $21,900. At the end of the project, net working capital will return to the level it was prior to undertaking the new project. The initial cost of the molding machine is $318,000. The equipment will be depreciated straight-line to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating an aftertax cash flow of $94,000. What is the net present value of this project given a required return of 12.3 percent?

Reference no: EM132020286

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