Present values of the relevant investment cash flow


Problem:

Healty Potions, Inc. , is cosidering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $59,679, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Healty Potions will recover these changes in working capital at the end of the project 10 years later. Assume the appropriate discount rate is 11.0 percent.

Required:

Question: What are the present values of the relevant investment cash flow?

Note: Please provide through step by step calculations.

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Accounting Basics: Present values of the relevant investment cash flow
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