Nakama Corporation is considering investing in a project:

It would have a 4 year expected useful life.

The company would need to invest $168,000 in equipment that will have zero salvage value at the end of the project.

Annual incremental sales would be $520,000 and annual cash operating expenses would be $300,000.

In year 3 the company would have to incur one-time renovation expenses of $96,000.

Working capital in the amount of $10,000 would be required. The working capital would be released for use elsewhere at the end of the project.

The company's tax rate is 30%.

The company uses straight-line depreciation on all equipment.

The company's discount rate is 12%

The depreciation expense in year 2 will be:

Question 11 options:

	$42,000
	$66,000
	$40,000
	$44,500

Question 12 (2 points)

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The income tax expense in year 2 will be:

Question 12 options:

	$24,600
	$50,400
	$32,600
	$53,400

Question 13 (2 points)

The net Cash Flow for year 2 is:

Question 13 options:

	$(178,000)
	$220,000
	$70,600
	$166,600

Question 14 (3 points)

The Net Present Value (NPV) for the whole project is:

Question 14 options:

	$56,260
	$230,000
	$496,394
	$286,546