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Management determine that they also have to invest $175,978 upfront for additional working capital. This working...

Management determine that they also have to invest $175,978 upfront for additional working capital. This working capital investment will be recovered at the end of the project.

The present value of the cash flows from the additional working capital investment is:

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Answer #1

Answer- Additional Working capital Requirement = $175978 is Required Upfront ie at Period 0.

Year Particulars Amount Discount Factor Discounted Value

0 Induction of Working Capital $175978 1.00 $175978

At Time of Recovery of Working capital At End of Project

Year   Particulars       Amount Discount Factor    Discounted Value

Last year Release of Working Capital ($175978) Shall be of last year ($175978)* Discount

Of Project of Project Factor

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