A Project Requires an Initial Investment of $10,000, Straight-Line Depreciable

question 53

Multiple Choice

A project requires an initial investment of $10,000, straight-line depreciable to zero over four years. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings
In the year in which the loss occurs. Additional information for variables with forecast error are
Shown below. What is the base case NPV for the project?

• A) $1,523
• B) $4,974
• C) $5,247
• D) $6,529
• E) $8,281

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