Find out the working capital for the calculation of npv

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Question - Find out the working capital for the calculation of an NPV for a startup business. The owner brings $500,000 of capital to the business account. The cost of equipment is $10,000, the sales revenue is $100,000 for the first year, and year 2 to 6 is $300,000. the expenses are $60,000 for the first year and $150,000 for the second year and then $200,000 for the other years. The expenses exclude the depreciation and include the corporate tax.

The cost of capital relates to the opportunity to invest in a savings account at an after-tax rate of 5%.

How do I figure the working capital at year 0 which is the beginning of the venture?

Reference no: EM133062122

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