Uses a straight line depreciation schedule

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Reference no: EM13814653

A firm is evaluating a project which will cost $7,586 today and provide additional cash flows in years 1, 2, 3 and 4 of $5,568, $2,586, $2,586, and $7,560, respectively. The project will also employ $5,000 in working capital during the life of the project (allocated at the beginning and paid back in the last period). Its salvage value at the end of year 4 will be zero and the company uses a straight line depreciation schedule. The firm uses a discount rate of 8%? What is the NPV?

a. $5,986

b. $7,396

c. $12,396

d. $13,182

e. $8,721

Reference no: EM13814653

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Uses a straight line depreciation schedule : A firm is evaluating a project which will cost $7,586 today and provide additional cash flows in years 1, 2, 3 and 4 of $5,568, $2,586, $2,586, and $7,560, respectively. The project will also employ $5,000 in working capital during the life of the pr..

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