Reynolds Metals is considering a project with a life of 4 years that will produce annual operating cash flows of $57,000. During the life of the project, inventory will be lowered by $28,000, accounts receivable will increase by $15,000, and accounts payable will increase by $6,000. The project requires the purchase of equipment at an initial cost of $104,000 that will be depreciated straight line to a zero book value over the life of the project. Ignore bonus depreciation. The equipment will be salvaged at the end of the project creating an aftertax cash inflow of $22,000. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 16 percent?

Multiple Choice

a. $79,876.02

b. $80,037.86

c. $78,117.05

d. $83,483.48

e. $76,153.17