Helen Becker

Business

25 October, 01:23

Parks Corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. The investment would provide cash inflows of $2,000 per year for six years. The working capital would be released for use elsewhere when the project is completed.

If the company's discount rate is 10%, the investment's net present value is closest to (Ignore income taxes):

a) $1,290 b) $ (1,290) c) $2,000 d) $4,350