Use the Following Information to Answer the Question(s)below

question 37

Multiple Choice

Use the following information to answer the question(s) below.
(Include the MACRS Table from the Appendix. )
Casa Grande Farms is considering purchasing multiple tractors for a total purchase price of $540,000.These tractors are expected to generate EBITDA of $250,000 for each of the next three years.Casa Grande Farms has a 35% tax rate and has a cost of capital of 10%.
-Assuming that Casa Grande Farms depreciates these tractors using MACRS depreciation method for three-year property starting immediately,then the NPV of buying the tractors is closest to:

• A)20,785
• B)36,225
• C)81,715
• D)513,235
• E)560,785

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Definitions:

E Ink

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Electronic reading devices that feature a backlight to illuminate the screen, enhancing readability in various lighting conditions.

Sharp Grayscale Display

A type of screen or monitor capable of displaying images in shades of gray, noted for its sharpness and clarity.

Color Display

A device or feature capable of showing images and videos in multiple colors, often used in monitors, televisions, and mobile screens.