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Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $175,000 and be depreciated on a 3-year MACRS and have no

Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $175,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $112,000, variable costs of $29,500, and fixed costs of $12,350. The project will also require net working capital of $2,950 that will be returned at the end of the project. The company has a tax rate of 34 percent and the project's required return is 12 percent. What is the net present value of this project?

Multiple Choice

  • $9,732

  • $13,492

  • $11,074

  • $8,921

  • $12,416

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