QUESTION 43 Palpatine Services recently hired you as a consultant to help with its capital budgeting process. The company is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. The risk-adjusted cost of capital is 10% What is the project's NPV? Risk-adjusted cost of capital 10.0% Net investment cost (depreciable basis) $65,000 Straight-line depree, rate 33.3333% Sales revenues, each year 565,500 Operating costs (excl. deprec.), cach year $25.000 Tax rate 25.0% O a $40,256 b. 834,515 OG $38,243 Od. 536,331 Oe. S42,375 QUESTION 43 Palpatine Services recently hired you as a consultant to help with its capital budgeting process. The company is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. The risk-adjusted cost of capital is 10% What is the project's NPV? Risk-adjusted cost of capital 10.0% Net investment cost (depreciable basis) $65,000 Straight-line depree, rate 33.3333% Sales revenues, each year 565,500 Operating costs (excl. deprec.), cach year $25.000 Tax rate 25.0% O a $40,256 b. 834,515 OG $38,243 Od. 536,331 Oe. S42,375