(Ignore income taxes in this problem.) Your Company is considering a project with a 6-year life. Your required rate of return is 14%. What is the net present value of the project? Project Cost of equipment needed now$50,000 Working capital investment needed now65,000 Annual cash operating inflows25,000 Salvage value of equipment in 6 years0Group of answer choices( $7,755.$47,225$13,350.$11,865

Computation of the net present value of the project is as follows:

Answered: Ignore income taxes in this problem.)…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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(Ignore income taxes in this problem.) Your Company is considering a project with a 6-year life. Your required rate of return is 14%. What is the net present value of the project?

		Project
	Cost of equipment needed now	$50,000
	Working capital investment needed now	65,000
	Annual cash operating inflows	25,000
	Salvage value of equipment in 6 years	0

Group of answer choices

( $7,755.

$47,225

$13,350.

$11,865

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