Which will be freed up at the end of project in four years

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Reference no: EM131998748

1. A project has an NPV of $200 at a discount rate of 10%. The original calculation ignored working capital. You have determined that the project will require an investment of working capital of $100, which will be freed up at the end of the project in four years. What is your revised estimate of the NPV?

$168

$200

$232

$268

$400

2. A project requires an investment of $500 and will produce a single product that will be sold in one year. The expected sales price of the product is $1,000, and the expected material cost of producing the product is $300. The actual sales price and material cost could be 10% higher or 10% lower than the expected values. The appropriate discount rate is between 13% and 15%. Ignore taxes. What is the NPV in the worst-case scenario?

A. $200

B. $109

C. $48

D. - $4

E.- $61

Reference no: EM131998748

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