The project will be discontinued after 5 years with no


Hawkeye Harvesters, Inc. is engaged in a contract with the United States Government to supply farm machinery. Hawkeye’s required return is 11.2%. Their marginal tax rate is 35%. HHI must have $100,000 in working capital at the start of the project and must add $10,000 to working capital at the end of years 1, 2, 3, and 4. The project will be discontinued after 5 years with no salvage value on any equipment. What is the effect on NPV of net working capital?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: The project will be discontinued after 5 years with no
Reference No:- TGS02308828

Expected delivery within 24 Hours