A pharmaceutical company purchased a materials handling system worth $80,000 as a strategy to increase the efficiency of its distribution system. The company expects to use the asset for 4 years and then sell it on the market for an estimated value of $45,000. Accounting information states that the asset can be depreciated using the maximum percentage method with a tax life of 6 years.

The company expects revenues of $120,000 in the first year and annual increases of 5% per year, while annual expenses are estimated at $40,000 for the first year, then increasing by $2,500 per year for the remainder of the planning horizon. If the company is subject to a 40% tax rate on its income tax payment, determine the Net Present Value (NPV) of this project, if the company establishes a MARR of 15% per year after taxes.

The answer is A: The Net Present Value of this investment is $102,185

If you get a value other than 102185, it is wrong.