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Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be

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Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be used, and it could sell it for $100,000 after taxes if it decides not to open the new office. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t= o. At the end of the project's life, the equipment would have zero salvage value. No change in net operating working capital (NOWC) would be required for the project. Revenues and operating costs would be constant over the project's 3-year life. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) Do not round the intermediate calculations and round the final answer to the nearest whole number. WACC Opportunity cost after taxes Equipment cost Annual sales revenues Annual operating costs Tax rate O a $39,093 Ob. $23,234 C. $10,593 O d. $38,484 e. $25,843 10.0% $100,000 $61,000 $126,000 $34,000 25.0%

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