Question

A new project is expected to generate an operating cash flow of $38,728 and will initially free up $11,610 in net working capital. Purchases of fixed assets costing $52,800 will be required to start up the project. What is the total cash flow for this project at time zero?

Answer 1

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❏The annuity payment formula is used to calculate the periodic payment on an annuity. An annuity is a series of periodic payments that are received at a future date.

❏The present value portion of the formula is the initial payout, with an example being the original payout on an amortized loan.

❏Present Value (PV) is a formula used in Finance that calculates the present day value of an amount that is received at a future date. The premise of the equation is that there is "time value of money".

Answer 2

Answer :

❏The annuity payment formula is used to calculate the periodic payment on an annuity. An annuity is a series of periodic payments that are received at a future date.

❏The present value portion of the formula is the initial payout, with an example being the original payout on an amortized loan.

★ Present Value (PV) is a formula used in Finance that calculates the present day value of an amount that is received at a future date. The premise of the equation is that there is "time value of money".

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