Can anyone shed some light on this NPV question?
An analyst gathered the following data about a project:
Costs are $8000 plus $2000 in shipping and installation
For the next five years the project will annually generate $5000.00 in sales and $2000 in costs, not including depreciation.
The project is being depreciated on a straight line basis over five years with no salvage value.
The company’s tax rare is 40% and the WACC is 10%.
The projects NPV is closest to:
A.) $144
B.) $144
C.) $279
D.) $1244 |