Moonrise Inc is considering expanding its operations. The expansion will require new equipment costing $649,000 that would be depreciated on a straight-line basis to a salvage value of $187,000 over the four-year life of the project. The project requires $38,000 initially for net working capital, all of which will be recouped at the end of the project. The projected operating cash flow is

$216,284

a year for four years. What is the net present value of this project if the relevant discount rate is 14 percent and the tax rate is 35 percent?

Question content area bottom

Part 1

A.

$76,407

B.

$91,908

C.

$53,908

D.

$34,312

E.

$37,656