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How Does Net Working Capital Affect the NPV of a 5-Year

Question 68

Multiple Choice

How does net working capital affect the NPV of a 5-year project if working capital is expected to increase by $25,000 and the firm has a 15% cost of capital?


A) NPV will increase by $9,322.
B) NPV will increase by $12,571.
C) NPV will decrease by $25,000.
D) NPV will decrease by $12,571.

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