Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of$12\%$ to evaluate this project. Based on extensive$$ research, it has prepared the following incremental cash flow$$ projections:

Year

$0$

$1$

$2$

$3$

Sales$($Revenues$)$

$100,000$

$100,000$

$100,000$

minus Cost of Goods Sold$(50\%$ of$$ Sales$)$

$-50,000$

$-50,000$

$-50,000$

minus Depreciation

$-30,000$

$-30,000$

$-30,000$

$=$ EBIT

$20,000$

$20,000$

$20,000$

minus Taxes$(21\%)$

$-4200$

$-4200$

$-4200$

$=$ unlevered net income

$15,800$

$15,800$

$15,800$

$+$ Depreciation

$30,000$

$30,000$

$30,000$

minus changes to working capital

$-5000$

$-5000$

$10,000$

minus capital expenditures

minus$90,000$

The NPV for$$ Epiphany's Project is closest$$ to:

Question content area bottom

Part $1$

A$.$

$$$$18,671$

B$.$

$$$$4825$

C$.$

$$$$39,000$

D$.$

$$$$20,400$