Problem:
Frisch Fish Corporation expects net income next year to be $600000. Inventory and accounts receivable will have to be increased by $300000 to accommodate this sales level. Frisch will pay dividends of $400000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities?
Stone, Inc., is evaluating a project with an initial cost of $8450. Cash inflows are expected to be $1000, $1000, and $1000 in the three years over which the project will produce cash flows. If the discount rate is 13 percent, what is the net present value of the project?