The Down Towner Is Considering a Project with a Life

Multiple Choice

The Down Towner is considering a project with a life of 4 years that will require $164,800 for fixed assets and $42,400 for net working capital.The fixed assets will be depreciated using the Year 2018 bonus depreciation method.At the end of the project,the fixed assets can be sold for $37,500 cash and the net working capital will return to its original level.The project is expected to generate annual sales of $195,000 and costs of $117,500.The tax rate is 24 percent and the required rate of return is 13 percent.What is the project's net present value?

A) $48,909.09
B) $46,482.43
C) $42,316.67
D) $56,500.00
E) $59,488.87