A machine is expected to produce increases in cash operating costs of $200,000 for the next six years.FV of 1 (i = 14%, n = 6):2.195FV of a series of $1 cash flows (i = 14%, n = 6):8.536PV of $1 (i = 14%; n = 6):0.456PV of a series of $1 cash flows (i = 14%, n = 6):3.889If the company has a 14% after-tax hurdle rate and is subject to a 30% income tax rate, the correct discounted net cash flow would be:
A. $(544,460).
B. $(777,800).
C. $(233,340).
D. $(1,011,140).
E. None of the other answers is correct.
Answer: A
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