A firm has projected the following financials for a possible project:YEARSalesCost of GoodsS&ADepreciationInvestment in NWCInvestment in Gross PPE01,130.00105,468.001132,716.00Submit549.00262,780.00 62,780.0030,000.00 30,000.00 30,000.0021,093.60 21,093.60 21,093.60Answer format: Currency: Round to: 2 decimal places.3132,716.00 132,716.00 132,716.00549.00What is the NPV of the project? (Hint: Be careful about rounding the WACC here!)462,780,00 62,780.00 62,780.0030,000.00549.0021,093.60549.005132,716.00The firm has a capital structure of 37.00% debt and 63.00% equity. The cost of debt is 9.00%, while the cost of equity isestimated at 15.00%. The tax rate facing the firm is 38.00%. (Assume that you can't recover the final NWC position inyear 5. i.e. only consider the change in NWC for each year)30,000.0021,093.60549.00

Net present is the difference between present value of all cash inflows and initial investment NPV…

YEAR Sales Cost of Goods S&A Depreciation Investment in NWC Investment in Gross PPE 0 1,130.00 105,468.00 1 2 21,093.60 21,093.60 549.00 3 132,716.00 132,716.00 132,716.00 132,716.00 62,780.00 62,780.00 62,780.00 62,780.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 21,093.60 21,093.60 549.00 549.00 4 132,716.00 62,780.00 549.00 21,093.60 549.00 The firm has a capital structure of 37.00% debt and 63.00% equity. The cost of debt is 9.00%, while the cost of equity is estimated at 15.00 %. The tax rate facing the firm is 38.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year)

YEAR Sales Cost of Goods S&A Depreciation Investment in NWC Investment in Gross PPE 0 1,130.00 105,468.00 1 2 21,093.60 21,093.60 549.00 3 132,716.00 132,716.00 132,716.00 132,716.00 62,780.00 62,780.00 62,780.00 62,780.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 21,093.60 21,093.60 549.00 549.00 4 132,716.00 62,780.00 549.00 21,093.60 549.00 The firm has a capital structure of 37.00% debt and 63.00% equity. The cost of debt is 9.00%, while the cost of equity is estimated at 15.00 %. The tax rate facing the firm is 38.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.2P

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