QUESTION $4$

Riverton Silver is considering buying a new extraction system. The new extraction system would be purchased today for $$56,300\mathrm{.}00.$ It would be depreciated straight$-$line to $$0$ over $2$ years. In $2$ years, the extraction system would be sold for an after$-$tax cash flow of $$2,970\mathrm{.}00.$ Without the extraction system, costs are expected to be $$97,000\mathrm{.}00$ in $1$ year and $$122,000\mathrm{.}00$ in $2$ years. With the extraction system, costs are expected to be $$75,500\mathrm{.}00$ in $1$ year and $$37,600\mathrm{.}00$ in $2$ years. If the tax rate is $34\mathrm{.}00\%$ and the cost of capital is $18\mathrm{.}85\%,$ what is the net present value of the new extraction system project?

$$4,265\mathrm{.}12($plus or minus $$10)$

$$19,486\mathrm{.}01($plus or minus $$10)$

$$5,332\mathrm{.}40($plus or minus $$10)$

$$12,006\mathrm{.}37($plus or minus $$10)$

None of the above is within $$10$ of the correct answer