1.

NBA stars Kevin Durant and Chris Paul own a company that faces a 40% tax rate and uses a 12% discount rate. They just invested $665,000 in equipment for the banking app Goalsetter that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will be salvaged for $176,000 at the end of the project. Kevin Durant and Chris Paul know that the project's operating cash flow will be $151,600 per year. What is the NPV of this project if it requires $46,000 initially for net working capital, which will be recovered at the end of the project?

Multiple Choice

• $9,815

• $10,905

• $11,632

• $12,925

• $13,919

2.

Five-year MACRS Table:

Year	Depreciation Percentage
1	20.00%
2	32.00
3	19.20
4	11.52
5	11.52
6	5.76

After their pizza oven was stolen, the owners of The Rose bought a new oven for $2,700,000. The new pizza oven is expected to last for 4 years and can be sold for $309,000 at the end of its life. What is the after-tax salvage value of the pizza oven if The Roses tax rate is 40%?

Multiple Choice

• $185,400

• $309,000

• $245,976

• $247,608

• $372,024