A new, more efficient machine will last four years and allow inventory levels to decrease by $100,000 during its life. At a cost of capital of 13 percent, how does the net working capital change affect the project's NPV?

A project that increased sales was accompanied by a $50,000 increase in inventory, a $20,000 increase in accounts receivable, and a $25,000 increase in accounts payable. Assuming these amounts remain constant, by how much has net working capital increased?

Allocations of overhead should not affect a project's incremental cash flows unless the:

If a project's cash flows include those triggered outside the project's incremental cash flows, it is likely that the:

A five-year project requires an additional commitment of $100,000 in net working capital. What is the present value opportunity cost associated with this investment?

The Golf Range is considering adding an additional driving range to its facility. The range would cost $229,000, would be depreciated on a straight-line basis over its seven-year life, and would have a zero salvage value. The anticipated revenue from the project is $62,500 a year with $18,400 of that amount being variable cost. The fixed cost would be $15,700. The firm believes that it will earn an additional $22,500 a year from its current operations should the driving range be added. The project will require $3,000 of net working capital, which is recoverable at the end of the project. What is the internal rate of return on this project at a tax rate of 21 percent?

Capital budgeting projects typically assume that all cash flows transpire at the end of the year. The reason for this is that:

At current prices and a 13 percent cost of capital, a project's NPV is $100,000. By what minimum amount must the initial cost of the project decrease (revenues will be unchanged) before you would prefer to wait two years before investing?

How does net working capital affect the NPV of a five-year project if working capital is expected to increase by $25,000 and the firm has a 15% cost of capital?

A parcel of corporate land was recently dedicated as the new plant site. What cost allocation should the land receive, based on the following: original cost of $200,000, market value of $300,000, net book value of $200,000, a recent offer to purchase for $250,000?