A Firm Invests $200 000 in Machinery That Yields Net

question 64

Multiple Choice

A firm invests $200 000 in machinery that yields net after-tax cash flows of $90 000 at the end of each of the next three years. The opportunity cost of capital is 12%. What is the net present value of the project (to the nearest thousand dollars) ?

• A) -$16 000
• B) -$8000
• C) $0
• D) $8000
• E) $16 000

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