6. Anderson Motors Inc. is contemplating building a new plant. The company anticipates that the plant will require an initial investment of $2 million in net working capital today. The plant will last 10 years, at which point the full investment in net working capital will be recovered. Given an annual discount rate of 6%, what is the net present value of this working capital investment? -$883,210 $503,110 -$598,983 -$2,000,000
6. Anderson Motors Inc. is contemplating building a new plant. The company anticipates that the plant will require an initial investment of $2 million in net working capital today. The plant will last 10 years, at which point the full investment in net working capital will be recovered. Given an annual discount rate of 6%, what is the net present value of this working capital investment? -$883,210 $503,110 -$598,983 -$2,000,000
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 26P
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