Acme Ltd, a scrap metal dealer, is considering the acquisition of a 'Roadrunner' metal compactor at the cost of $25,000. The compactor is estimated to have zero value at the end of its five-year life. It will return the following annual net cash flows.

Year Net cash flow ($)

year1 6000

year 2 10,000

year 3 2,000

year 4 15,000

year5 7000

Depreciation is $5000 per annum and the company tax rate is 40 per cent.

Compute the project's NPV. If the project's after-tax required rate of return is 8 per cent per annum, should the project be adopted?

Group of answer choices

$4,977

$6,652

-$6,652

- $4,977