Question completion Status: XYZ is evaluating the Reno project. The project would require an initial investment of $136,000 that would be depreciated to $16,000 over 6 years using straight-line depreciation. The project is expected to have operating cash flows of $41,000 per year forever. XYZ expects the project to have an after-tax terminal value of $186,000 in 3 years. The tax rate is 30%. What is (X+Yy/Z if X is the project's relevant expected cash flow in year 3, Y is the project's relevant expected cash flow in year 4, and Z is the project's relevant expected cash flow in year 27 a. A number less than 4.00 or a number equal to or greater than 8.00 b. A number equal to or greater than 4.00 but less than 5.00 c. A number equal to or greater than 5.00 but less than 6.00 d. A number equal to or greater than 6.00 but less than 7.00 e. A number equal to or greater than 7.00 but less than 8.00 QUESTION 2 XYZ is considering a project that would last for 3 years and have a cost of capital of 21.0 percent. The relevant level of net working capital for the project is expected to be $2,000 immediately (at year 0); $5,000 in 1 year; $15,000 in 2 years, and 50 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 50 percent. What is the net present value of this project? Year 0 Year 1 Year 2 Year 3 Revenue $0 $12,000 $12,000 $12,000 Costs $0 $4,000 $4,000 $4,000 Depreciation $0 $2,000 $2,000 $2,000 Cash flows from capital spending -$7,000 $0 $4,000 a. $2,785 (plus or minus $10) b. $8,470 (plus or minus $10) C. -$10,750 (plus or minus $10) d. $527 (plus or minus $10) $0 ick Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers