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What is the net present value for the investment

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Reference no: EM132527181

Firefox Company is considering the following investment proposal:

Initial investment:

Depreciable assets (straight-line)                 $36,000

Working capital                                            4,000

Operations (per year for 4 years):

Cash receipts                                           $25,000

Cash expenditures                                      11,000

Disinvestment:

Salvage value of equipment                          $3,000

Recovery of working capital                           4,000

Discount rate:                                        10 percent

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

Present value of $1                               0.68301

Present value of an annuity of $1            3.16987

Question 1: What is the net present value for the investment?

Option 1: $4,781

Option 2: $9,159

Option 3: $18,322

Option 4: $44,378

Reference no: EM132527181

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