What is net present value

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Reference no: EM131933783

Assume XYZ Company is considering a project where capital cost will be $1,200,000.00 with a salvage value of 100,000. The project will require 150,000 in working capital. Cash flows will be 313,000 the first year, 425,000 the second year, and 675,000 the third year, this investment is of average risk for XYZ and the Weighted Average Cost of Capital is 7%. Not considering taxes.

A) What is the Net Present Value?

B) If the Tax Rate was 35%, What would the Net Present Value be?

Reference no: EM131933783

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