Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $33,000, increase the level of inventory by $53,000, increase accounts receivable by $48,000, and increase accounts payable by $28,000 at the beginning of the project. Blossom will recover these changes in working capital at the end of the project 14 years later. Assume the appropriate discount rate is 12 percent. What are the present values of the relevant investment cash flows? (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 5,275.25.) Present value

Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $33,000, increase the level of inventory by $53,000, increase accounts receivable by $48,000, and increase accounts payable by $28,000 at the beginning of the project. Blossom will recover these changes in working capital at the end of the project 14 years later. Assume the appropriate discount rate is 12 percent. What are the present values of the relevant investment cash flows? (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 5,275.25.) Present value

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Description: Blossom, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the companyneeds to increase its cash and cash equivalents by $33,000, increase the level of inventory by $53,000, increase accoun

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 4P

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