Bugs Buster Is Considering Investing in a New Risky Project

Bugs Buster is considering investing in a new risky project that requires $100,000 for the purchase of new equipment and $20,000 for additional net working capital.The equipment has a five-year life and a CCA rate of 30 percent.The equipment is expected to sell for $8,500 at the end of the project.Assume the asset class remains open after the asset is sold.The firm's cost of capital is 12 percent and marginal tax rate is 35 percent.The risk premium for the project is 3 percent.What is the present value of the terminal after-tax cash flow?

A) $14,169.54
B) $16,171.67
C) $16,241.76
D) $18,536.69