A company is considering a project where capital costs will be $1,200,000 with a salvage value of 100,000. The project requires 150,000 in working capital. Cash flows will be 313,000 the first year 425,000 the second year and 675,000 the third year. Investment is of average risk and the WACC is 7% not considering taxes:

What is NPV?

a. -135,264

b. -53,634.32

c. 68,810

d. 213,000

e. 218,810

If the tax rate 35% what would the NPV be?

a. 28,570

b. 40,240

c. -82,204.32

d. -163,834

e. 67,794