What happens to the NPV of a one-year project if fixed costs are increased from $400 to $600, the firm is not profitable, has a 35% tax rate, and employs a 12% cost of capital?
A) NPV decreases by $200.00.
B) NPV decreases by $178.57.
C) NPV decreases by $130.00.
D) NPV decreases by $113.04.
Correct Answer:
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