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Assume a 5-Year Project Has a Base-Case NPV of $213,000,a

Question 4

Multiple Choice

Assume a 5-year project has a base-case NPV of $213,000,a tax rate of 34%,and a cost of capital of 14%.What will be the worst-case NPV if the annual after-tax cash flows are reduced in that scenario by $35,000 for each of the 5 years?


A) −$92,842.17
B) −$120,157.83
C) $92,842.17
D) $120,157.83

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