Given the Following Information and Assuming a CCA Rate of 30

question 323

Multiple Choice

Given the following information and assuming a CCA rate of 30% (Class 10) , what is the NPV for this project? Initial investment in fixed assets = $800,000; initial investment in net working capital =
$200,000; life = four years; pre-tax cost savings = $400,000 per year; salvage = $10,000 in year 4;
Tax rate = 35%; discount rate = 12%.

• A) $50,000
• B) $0
• C) -$37,059
• D) $110,866.55
• E) $400,000

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