19 A company needs an increase in working capital of 20000 i

19. A company needs an increase in working capital of $20,000 in a project that will last 4 years. The company\'s tax rate is 30% and its after-tax discount rate is 10%. How much is the present value of the release of the working capital at the end of the project closest to?

A. $13,660

B. $14,000

C. $6,000

D. $9,562

Option. A is correct:

Present value of money:	=	FV/ (1+r) ^{^N}



Future value	FV=	20000
Rate of interest	r=	10%

Number of periods	N=	4

Present value	=	20000/ (1+0.1)^4
	=	13,660.27

$19. A company needs an increase in working capital of $20,000 in a project that will last 4 years. The company\'s tax rate is 30% and its after-tax discount rat$

19 A company needs an increase in working capital of 20000 i

Solution

Get Help Now

Submit a Take Down Notice