Assume that a company is considering a capital investment project with a four-year time horizon and the following cash flows:

Cost of new equipment	$ 210,000
Working capital required	$ 50,000
Annual net cash inflows	$ 100,000
Maintenance and repairs in third year	$ 40,000
Salvage value of equipment in fourth year	$ 25,000

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The working capital will be released at the end of the project and the companys required rate of return is 21%. The net present value of the project is closest to:

Multiple Choice

• $16,365.

• $32,365.

• $(2,165).

• $6,465.