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What Is the NPV of a Project That Costs $100,000

Question 34

Multiple Choice

What is the NPV of a project that costs $100,000, provides $23,000 in cash flows annually for six years, requires a $5,000 increase in net working capital, and depreciates the asset at 15 percent declining balance over six years and sold at zero salvage value? The discount rate is 14 percent.The tax rate is 40 percent.


A) -$23,460
B) -$13,283
C) $13,283
D) $44,866

Correct Answer:

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