Question
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
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$9,732
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$13,492
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$11,074
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$8,921
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$12,416
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