Rollans Corporation Has Provided the Following Information Concerning a Capital

question 56

Multiple Choice

Rollans Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.
Use Exhibit 7B-1, to determine the appropriate discount factor(s) using the tables provided.
The net present value of the entire project is closest to:

• A) $308,778
• B) $224,000
• C) $108,778
• D) $118,230

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