A Project Involves an Immediate Expenditure of $10 000, and Further

Multiple Choice

A project involves an immediate expenditure of $10 000, and further expenditures of $10 000 every year for the next four years. It will yield an income of $8 000 at the end of the first year, and this will increase by $8 000 a year. This is the only project the company has; it is taxed at 50%, and its after-tax MARR is 10%. Assume that losses cannot be carried forward to offset future income. What is the present worth of the project to the company?

A) $7 452
B) $9 342
C) $12 296
D) $15 251
E) $27 552