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A cente has a 7years contract Cost of special equipment needed now 500000 Initial supply of lubricants: 90000 Net annual operating cash flow: 150000 Salvage

A cente has a 7years contract Cost of special equipment needed now 500000 Initial supply of lubricants: 90000 Net annual operating cash flow: 150000 Salvage value of equipment in 7 years: 25000 The special equipment is in 5years property class. Thw tax rate is 30% for ordinary income and 15% for capital gain. the center after tax cost of capital is 16%. The present value after tax net operating cash flow is

A. 605785

B. 424049

C. 181735

514917

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