Given the Following Information,calculate the NPV of a Proposed Project

question 191

Multiple Choice

Given the following information,calculate the NPV of a proposed project: Cost = $4,000;estimated life = 3 years;initial decrease in accounts receivable = $1000,which must be restored at the end of the project's life;estimated salvage value = $1,000;net income before taxes and depreciation = $2,000 per year;method of depreciation = MACRS;tax rate = 40 percent;required rate of return = 18 percent.

• A) $1,137
• B) −$151
• C) $137
• D) $804
• E) $544