A Project Has an Initial Requirement of $318,000 for Fixed

question 44

Multiple Choice

A project has an initial requirement of $318,000 for fixed assets and $29,500 for net working capital.The fixed assets will be depreciated to a zero book value over the four-year life of the project and have an estimated salvage value of $110,000.All of the net working capital will be recouped at the end of the project.The annual operating cash flow is $96,200 and the discount rate is 14 percent.What is the project's net present value if the tax rate is 34 percent?

• A)$14,265.87
• B)$8,048.51
• C)-$6,749.48
• D)-$7,880.06
• E)$17,919.19

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