A Project Will Produce an Operating Cash Flow of $7,300

Multiple Choice

A project will produce an operating cash flow of $7,300 a year for three years.The initial investment for fixed assets will be $11,600,which will be depreciated straight-line to zero over the asset's 4-year life.Ignore bonus depreciation.The project will require an initial $500 in net working capital plus an additional $500 every year with all net working capital levels restored to their original levels when the project ends.The fixed assets can be sold for an estimated $2,500 at the end of the project,the combined tax rate is 23 percent,and the required rate of return is 12 percent.What is the net present value of the project?

A) $7,500.95
B) $9,896.87
C) $7,072.72
D) $6,353.41
E) $8,398.29