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Question 4 5 points Saved XYZ is considering buying a new sterilization system. The new sterilization system would be purchased today for $88,000. It would
Question 4 5 points Saved XYZ is considering buying a new sterilization system. The new sterilization system would be purchased today for $88,000. It would be depreciated straight-line to $0 over 2 years. In 2 years, the sterilization system would be sold for an after-tax cash flow of $37,000. Without the sterilization system, costs are expected to be $110,000 in 1 year and $150,000 in 2 years. With the sterilization system, costs are expected to be $76,000 in 1 year and $52,000 in 2 years. If the tax rate is 50% and the cost of capital is 7.86%, what is the net present value of the new sterilization system project? a. $40,991 (plus or minus $50) b. $31,720 (plus or minus $50) C. $9,187 (plus or minus $50) d. $25,089 (plus or minus $50) e. None of the above is within $50 of the correct
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