The Weyland$-$Yutani Corporation is considering a new four$-$year

expansion project that requires an initial fixed asset investment

of $$400,000.$ The fixed asset will be depreciated straight line to

zero over its four$-$year tax life. The fixed asset will have a market

value of $$225,000$ at the end of the project$$s life. The project

requires an initial investment in net working capital of $$275,000.$

The working capital will be recovered at the end of the projects$$

four$-$year life. The project is estimated to generate $$1,100,000$ in

annual sales, with annual costs of $$800,000.$ The tax rate is $35$

percent and the firm uses an abnormally high discount rate of $30$

percent for the project.

Compute the NPV and IRR for this project.

a$.$ NPV $=-$$$29,273,$ IRR $=27\mathrm{.}81$

b$.$ NPV $=$ $$24,850,$ IRR $=34\mathrm{.}00$

c$.$ NPV $=$ $$38,994,$ IRR $=42\mathrm{.}52$

d$.$ NPV $=-$$$78,235,$ IRR $=18\mathrm{.}35$

e$.$ NPV $=$ $$91,000,$ IRR $=43\mathrm{.}26$