Margarite's Enterprises is considering a new project.The project will require €325,000 for new non-current assets,€160,000 for additional inventory and €35,000 for additional trade receivables.Short-term debt is expected to increase by €100,000 and long-term debt is expected to increase by €300,000.The project has a 5-year life.The non-current assets will be depreciated straight-line to a zero book value over the life of the project.At the end of the project,the non-current assets can be sold for 25% of their original cost.The net working capital returns to its original level at the end of the project.The project is expected to generate annual sales of €554,000 and costs of €430,000.The tax rate is 35% and the required rate of return is 15%.What is the cash flow recovery from net working capital at the end of this project?

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The Answer of Margarite's Enterprises is considering a new project.The project will require €325,000 for new non-current assets,€160,000 for additional inventory and €35,000 for additional trade receivables.Short-term debt is expected to increase by €100,000 and long-term debt is expected to increase by €300,000.The project has a 5-year life.The non-current assets will be depreciated straight-line to a zero book value over the life of the project.At the end of the project,the non-current assets can be sold for 25% of their original cost.The net working capital returns to its original level at the end of the project.The project is expected to generate annual sales of €554,000 and costs of €430,000.The tax rate is 35% and the required rate of return is 15%.What is the cash flow recovery from net working capital at the end of this project?

Margarite's Enterprises Is Considering a New Project