Question

5 pts Question 18 When you were having dinner with your head accountant you remarked on the idea of buying capital assets from Flores Cruise Lines. She indicated some information required. You are given for the following information: OCF per year of 255,424, fiwed assets of $4,169,000, NWC of $84,00, number of years is 7 and rate of return of 0.0805. The assets wil be ully depreciated by the end of the project and the NWC will not change during the project's life. What is the NPV for that purchase? O-$2.58892606 -$2.876.584 51 -$3.020 41373 $3.164,242.96 -$2.301 267.61

Answer 1

Answer is -$ 2876584.51
Annual OCF			255424
Annuity PVF at 8.05% for 7 years			5.19748
Present value of Inflows			1327561
WC release (84000*0.581603)			48854.65
Total PV of inflows			1376416
Less: Initial Investment			4169000
Less: WC investment			84000
NPV			-2876584