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

question 49

Multiple Choice

Use the information below to answer the following question(s) .Neptune Ltd.wants to expand its operations by manufacturing a new product line.New equipment will cost $225,000.Incremental sales are estimated at $150,000 per year for 6 years.Variable costs of producing the new product line are 52% of sales and incremental annual fixed costs are $25,000.The equipment can be salvaged after 6 years for 16% of its original cost.The company's required rate of return for new projects is 18%.Ignore income taxes.
-What is the net present value of the Neptune Ltd.investment?

• A)($26,291)
• B)($47,277)
• C)$225,536
• D)($60,613)
• E)$93,000

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