28:26 Mattice Corporation is considering investing $750,000 in a project. The life of the project would be 11 years. The project would require additional working capital of $25,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $160,000. The salvage value of the assets used in the project would be $35,000. The company uses a discount rate of 18%. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. Required: Compute the net present value of the project. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.) Net present value

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter19: Capital Investment
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Problem 22E
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28:26
Mattice Corporation is considering investing $750,000 in a project. The life of the project would be 11 years. The project would require
additional working capital of $25,000, which would be released for use elsewhere at the end of the project. The annual net cash
inflows would be $160,000. The salvage value of the assets used in the project would be $35,000. The company uses a discount rate
of 18%. (Ignore income taxes.)
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.
Required:
Compute the net present value of the project. (Negative amount should be indicated by a minus sign. Round your intermediate
calculations and final answer to the nearest whole dollar amount.)
Net present value
Transcribed Image Text:28:26 Mattice Corporation is considering investing $750,000 in a project. The life of the project would be 11 years. The project would require additional working capital of $25,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $160,000. The salvage value of the assets used in the project would be $35,000. The company uses a discount rate of 18%. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. Required: Compute the net present value of the project. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.) Net present value
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