What Is the NPV for a Project If Its Cost

question 145

Multiple Choice

What is the NPV for a project if its cost of capital is 12 percent and its initial after-tax cost is $5,000,000 and it is expected to provide after-tax operating cash flows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and ($1,300,000) in year 4?

• A) -$1,494,336
• B) $158,011
• C) -$158,011
• D) $3,505,664

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