Margarites enterprises is considering a new project the


Question: Margarite's Enterprises is considering a new project. The project will require 325000 for new fixed assets s 60,000 for addnionalinventory and s 3000 for addition accounts receivable. Short-term debt ls expected to Increase by S100,000 and long-term debt is expected to increase by S300.000. The project has as year infe The fbed assets wil be depreciated straight-line to a zero book value over the life of the prorect At the end of the project, the fboed assets can be sold for 25% of their orignal cost The net working capital returns to its onginal level at the end of the project. The project expected to generate annual sales of s54000 and costs of sa30ooo The tax rate is 35% and the requred rate of return Is 15%. What is the cash now recovery from net working capital at the end of this project?

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