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ABC Inc. wants to invest in equipment that costs $82,800 today (zero salvage value) that...

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Accounting

ABC Inc. wants to invest in equipment that costs $82,800 today (zero salvage value) that will increase its pre-tax operating cash flows (excluding PVCCATS) by $33,800 per year for 6 years. The project requires a $4,000 increase in net working capital today which will be recovered in 7 years. The discount rate is 14.90% and the tax rate is 40%. What is the overall impact of the changes in working capital on the NPV?

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