A project has the following projected cash inflows.Year 1 100,000Year 2 125,000Year 3 105,000Working capital is required to be in place at the start of each year equal to 10% of the cash inflow for that year. The cost of capital is 10%.What is the present value of the working capital?
A: $ Nil
B: $(30,036)
C: $(2,735)
D: $33,000
A: $ Nil
B: $(30,036)
C: $(2,735)
D: $33,000
举一反三
- Which of the following statement is not true? A: The initial investment in working capital is a cash outflow at the ending of the project for items such as inventories B: Working capital is recaptured at the end of the project when working capital is no longer required C: Depreciation is not a current cash outflow. D: Discounted cash flow methods automatically provide for a return of the original investment, thereby making a deduction for depreciation unnecessary
- Year 1 2 3 4Free Cash Flow $12 million $18 million $22 million $26 millionConundrum Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 6% per year. If the weighted average cost of capital is 12% and Conundrum has cash of $80 million, debt of $60 million, and 30 million shares outstanding, what is Conundrum's expected terminal enterprise value at year 4? A: $413.4 million B: $459.3 million C: $505.3 million D: $528.2 million
- Your management is evaluating a project which requires an investment of $500,000. The expected inflow is $100,000 for 1st year, and $300,000 for every year after that. What is the payback period A: 2 year B: 2 years and 4 month C: 3 year D: Cannot be determined because discount rate is not specifie
- You obtain the following data for year 1: Revenue = $43; variable costs = $30; depreciation = $3; tax rate = 30 percent. Calculate the operating cash flow for the project for year 1. A: $7 B: $10 C: $13 D: $16
- The following potential cash flows are predicted for maintenance costs for the Great machine: Year Cash flow Probability ($) 2 19,000 0.55 2 26,000 0.45 3 21,000 0.3 3 25,000 0.25 3 31,000 0.45What is the expected present value of the maintenance costs for year 2 (to the nearest whole number)?$