The following information concerning a proposed capital budgeting project has been provided by Jochum Corporation:Use Exhibit 13B-1 to determine the appropriate discount factor(s). Investment required in equipment$200,000?Salvage value of equipment$0?Working capital requirement$40,000?Annual sales$660,000?Annual cash operating expenses$474,000?One-time renovation expense in year 3$60,000? The expected life of the project is 4 years. The income tax rate is 30%. The after-tax discount rate is 14%. The company uses straight-line depreciation on all equipment and the annual depreciation expense would be $50,000. 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: (Round intermediate calculations and final answer to the nearest dollar amount.)
A. $178,297
B. $338,800
C. $300,600
D. $136,835
Answer: A
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