If the firms discount rate is 6 what is the effect of the


Your consulting firm has been hired to evaluate a manufacturing process. In order to value the process, you’ve decided to value each piece separately (including inventory/cash management). The process requires an initial amount of NWC of $500k. Each year, NWC will grow by $100k. The process will be in operation for 10 year before shutting down (and freeing up the NWC). If the firm’s discount rate is 6%, what is the effect of the project’s NWC on the total NPV of the project (i.e., what is the NPV of the NWC)? Please list the formula involved in solving this question.

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Financial Management: If the firms discount rate is 6 what is the effect of the
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