A project requires an initial investment of $10,000, straight-line depreciable to zero over four years. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings in the year in which the loss occurs. Additional information for variables with forecast error are shown below. What is the worst case NPV for the project?
A) -$11,594
B) -$10,967
C) -$4,423
D) -$2,327
E) +$3,677

Question

A project requires an initial investment of $10,000, straight-line depreciable to zero over four years. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings in the year in which the loss occurs. Additional information for variables with forecast error are shown below.  What is the worst case NPV for the project?
A) -$11,594 
B) -$10,967 
C) -$4,423 
D) -$2,327 
E) +$3,677

Quizplus · Accepted Answer

The Answer of A project requires an initial investment of $10,000, straight-line depreciable to zero over four years. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings in the year in which the loss occurs. Additional information for variables with forecast error are shown below.  What is the worst case NPV for the project?
A) -$11,594 
B) -$10,967 
C) -$4,423 
D) -$2,327 
E) +$3,677

A Project Requires an Initial Investment of $10,000, Straight-Line Depreciable