Question N1 - XYZ is considering a 3-yr project. The initialoutlay is $120,000, annual cash flow is $50,000 and the terminalcash flow is $10,000. The required rate of return (cost of capital)is 15%. The net present value is $736.42. What if the annual cashflow increases to $57,000 instead? Re-calculate the NPV.
Question N2 - Six years ago, XYZ Company invested $51,959 in anew machinery. The investment in net working capital was $4,716which would be recovered at the end of the project. Today, XYZCompany is selling the machinery for $24,092. Today, the book valueof the machinery is $11,215. The tax rate is 26 percent. What arethe terminal cash flows in Year 6?
Enter your answer rounded off to two decimal points. Do notenter $ or comma in the answer box. For example, if your answer is$12.345 then enter as 12.35 in the answer box
