Bruno's Lunch Counter is expanding and expects operating cash flows of $$26,100$ a year for $6$ years as a result. This expansion requires $$91,600$ in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $$6,400$ of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of $12$ percent?

Gateway Communications is considering a project with an initial fixed assets cost of $$1\mathrm{.}58$ million that will be depreciated straight$-$line to a zero book value over the $9$ year life of the project. At the end of the project the equipment will be sold for an estimated $$237,000.$ The project will not change sales but will reduce operating costs by $$393,000$ per year. The tax rate is $23$ percent and the required return is $11\mathrm{.}2$ percent. The project will require $$50,500$ in net working capital, which will be recouped when the project ends. What is the project's NPV$?$

Multiple Choice