National Manufacturing Company is considering buying some new equipment that would allow for increased sales of its product. The incremental impact of the proposed $400,000 investment is shown below using straight-line depreciation and an expected useful life of four years for the equipment. The company has a minimum desired rate of return of 14%.

Revenues $500,000

Nondepreciating expenses $300,000

Depreciation $100,000

Total expenses $400,000

Taxable income $100,000

Income tax (40%) $40,000

Net income $60,000

Question 11: The NPV of the investment using straight-line depreciation is _____.

Question 11 options:

($280,000)

$66,192

$349,644

$116,548