What should be the projects npv including the effects

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Reference no: EM131985036

Answer the following question

Your subordinate just submitted a proposal. You find that the analysis is correct except that it has ignored net working capital.

You expect net working capital to be $450,000 at time 0, $900,000 from year 1 to year 4, $750,000 from year 5 to year 9 and totally recovered at year 10.

If your subordinate had calculated an NPV of $580,000, what should be the project's NPV including the effects of changes in net working capital? Assume a cost of capital of 10% and a tax rate of 34%

Reference no: EM131985036

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