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What is the net present value of expansion

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Reference no: EM131628184

Daisy's Donuts is expanding its operations. This expansion requires $59,000 in new fixed assets, which are expected to be worthless at the end of the project. Daisy expects operating cash flows of $16,000 per year for 4 years as a result of the expansion. In addition, the project requires $4,000 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 8.5 percent?

  • -$7,704
  • -$3,808
  • $7,989
  • $14,903
  • $18,477

Reference no: EM131628184

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