Dobrinski Corporation has provided the following information concerning a capital budgeting project:
The company uses straight-line depreciation on all equipment.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.
The net present value of the project is closest to:
A) $144,210
B) $210,000
C) $77,709
D) $59,949

Question

Dobrinski Corporation has provided the following information concerning a capital budgeting project:
 The company uses straight-line depreciation on all equipment.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.
The net present value of the project is closest to:
A) $144,210 
B) $210,000 
C) $77,709 
D) $59,949

Quizplus · Accepted Answer

Depreciation expense = (Original cost - Salvage value) ÷ Useful life
= ($240,000 - $0) ÷ 4 years = $60,000 per year
 11ea7761_15d0_58b0_81a5_07d03af05933_TB2580_00

Dobrinski Corporation Has Provided the Following Information Concerning a Capital