Multiple Choice
Marasco Corporation has provided the following information concerning a capital budgeting project: The income tax rate is 30%. The after-tax discount rate is 13%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $20,000. 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.
Use Exhibit 7B-1 to determine the appropriate discount factor(s) using table.
The net present value of the project is closest to:
A) $91,000
B) $128,199
C) $77,650
D) $48,199
Correct Answer:

Verified
Correct Answer:
Verified
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