The Machinery Required for a Three Year Project Costs $20,000

question 4

Multiple Choice

The machinery required for a three year project costs $20,000, belongs in a 15% CCA class, and will require a net working capital investment of $5,000 up-front. The project generates after-tax
Operating income of $11,501. The fixed assets will be sold for $2,000 at the end of the project. If the
firm has a tax rate of 34% and a required return of 10%, what is the project NPV?

• A) $10,724
• B) $11,033
• C) $12,446
• D) $13,426
• E) $15,942