A Project Will Produce Operating Cash Flows of $39,000 a Year

Multiple Choice

A project will produce operating cash flows of $39,000 a year for 4 years.During the life of the project,inventory will be lowered by $9,000,accounts receivable will increase by $14,000,and accounts payable will increase by $11,000.The project requires $118,000 of new equipment that will be depreciated straight-line to a zero book value over 4 years.At the end of the project,net working capital will return to its normal level and the equipment will be sold for $21,000,aftertaxes.What is the net present value given a required return of 13 percent?

A) $14,322.49
B) $13,483.48
C) $18,117.05
D) $13,204.16
E) $12,804.42