Marasco Corporation has provided the following information concerning a capital budgeting project: The income tax rate is 30%. The after-tax discount rate is 13%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $20,000. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.Click here to view Exhibit 14B-1 to determine the appropriate discount factor(s) using table.The net present value of the project is closest to:
A) $91,000
B) $128,199
C) $77,650
D) $48,199

Question

Marasco Corporation has provided the following information concerning a capital budgeting project:  The income tax rate is 30%. The after-tax discount rate is 13%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $20,000. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.Click here to view Exhibit 14B-1 to determine the appropriate discount factor(s) using table.The net present value of the project is closest to:
A) $91,000 
B) $128,199 
C) $77,650 
D) $48,199

Quizplus · Accepted Answer

The Answer of Marasco Corporation has provided the following information concerning a capital budgeting project:  The income tax rate is 30%. The after-tax discount rate is 13%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $20,000. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.Click here to view Exhibit 14B-1 to determine the appropriate discount factor(s) using table.The net present value of the project is closest to:
A) $91,000 
B) $128,199 
C) $77,650 
D) $48,199

Marasco Corporation Has Provided the Following Information Concerning a Capital