Penniston Corporation is considering a capital budgeting project that would require an initial investment of $630,000 and workin

Question

3 years ago

15

Penniston Corporation is considering a capital budgeting project that would require an initial investment of $630,000 and workin

g capital of $73,000. The working capital would be released for use elsewhere at the end of the project in 3 years. The investment would generate annual cash inflows of $228,000 for the life of the project. At the end of the project, equipment that had been used in the project could be sold for $29,000. The company’s discount rate is 12%. The net present value of the project is closest to:

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