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What is the net present value for the investment

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Reference no: EM131611871

Problem - Pickleball Company is considering the following investment proposal:

Initial investment:

Depreciable assets (straight-line) $72,000

 Working capital 8,000

Operations (per year for 4 years):

Cash receipts $50,000

Cash expenditures 22,000

Disinvestment:

Salvage value of equipment $6,000

 Recovery of working capital 8,000

Discount rate: 10 percent

Additional information for interest rate of 10 percent and four time periods:

Present value of $1 - 0.683

Present value of an annuity of $1 - 3.170

What is the net present value for the investment?

A. $ 5,256

B. $18,322

C. $65,256

D. $57,060

Reference no: EM131611871

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