No other firm would take on this project if Garida turns it down. How much should Garida reduce the NPV of this project if it discovered that this project would reduce one of its divisions net after-tax cash flows by $400 for each year of the four-year project?

$1,055

$931

$1,365

$1,241

The project will require an initial investment of $10,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $18,000, after taxes, if the project is rejected. What should Garida do to take this information into account?

Increase the amount of the initial investment by $18,000.

Increase the NPV of the project by $18,000.

The company does not need to do anything with the value of the truck because the truck is a sunk cost.