No other firm would take on this project if Yeatman turns it down. How much should Yeatman reduce the NPV of this project if it discovered that this project would reduce one of its divisions net after-tax cash flows by $300 for each year of the four-year project?

$931

$1,024

$698

$791

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 $14,000, after taxes, if the project is rejected. What should Yeatman do to take this information into account?

Increase the amount of the initial investment by $14,000.

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

Increase the NPV of the project by $14,000.