Exhibit 7B-1 Present Value of $1; 
Manjarrez Corporation has provided the following information concerning a capital budgeting project: Investment required in equipment$240,000 Expected life of the project 4 Salvage value of equipment$0 Annual sales$560,000 Annual cash operating expenses$430,000 The company's income tax rate is 30% and its after-tax discount rate is 6%. 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. Use Exhibit 7B-1 to determine the appropriate discount factor(s) using table. The net present value of the entire project is closest to:
A. $196,000
B. $377,685
C. $210,450
D. $137,685
Answer: D
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