Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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ABC, Inc. is considering a project that requires €21,000 in net working capital and €121,000 in fixed assets, which will be depreciated straight-line to zero over the three-year life of the project. The fixed assets have a salvage value of €28,500. The operating cash flow of the project is €61,300 per year. The tax rate is 35% and the required rate of return

is 16%. What is the NPV of this project?

  1. €11,887

  2. €14,226

  3. €20,995

  4. €24,289

  5. None of the above.

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