Mcelveen Corporation has provided the following information concerning a capital budgeting project: After-tax discount rate 13%Tax rate 30%Expected life of the project 4 Investment required in equipment$80,000 Salvage value of equipment$0 Working capital requirement$20,000 Annual sales$180,000 Annual cash operating expenses$130,000 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.See separate Exhibit 13B-1 to determine the appropriate discount factor(s) using table.The net present value of the project is closest to:
A. $60,960
B. $34,194
C. $21,934
D. $84,000
Answer: B
Business
You might also like to view...
Distinguish between a supply chain and a value chain. How do they relate to each other?
Business
When using a cost-based approach, once the cost of a good or service has been determined, additional factors need not be considered in establishing a selling price
Indicate whether the statement is true or false
Business
The National Labor Relations Board is required to supervise all consent elections
Indicate whether the statement is true or false
Business
A Eurodollar is a U.S. dollar deposited in a bank outside the United States.
Answer the following statement true (T) or false (F)
Business