Question $14$ of $16$

Cierra Inc is investing in a new machine. The machine will generate net annual cash flows of $$50,000.$ The machine costs $$120,000$ and will require a $$30,000$ upfront investment in working capital. The working capital will be recovered at the end of five years when the machine will be scrapped.

If Cierra's interest rate is $15\%,$ what is the NET present value of the project assuming an income tax rate of $30\%?$ Don't forget the annual depreciation tax savings. Also, don't forget that the end$-$of$-$project return of the working capital investment does not involve any income taxes.

Select an answer:

$156376$

$6376$

$32523$

$38910$