There is a project under consideration. This project (3 year life) requires $180,000, and there is no salvage value and no net working capital is needed. The required return for this project is 12%. This project The pro forma income statement is follows:

Sales: $200,000

Costs: $120,000

Depreciation: $60,000

EBIT: ???

Taxes (30%): ???

Net Income: ???

Suppose this firm is currently earning a large amount of positive net income from the other projects. If the initial investment of $180,000 is financed at 10% interest rate and the marginal tax rate for the firm is 30%, what is the financial side effect (tax benefits) from this project? If this financial side effect is considered, is this project acceptable?

A) $1,800; No

B) $2,500; No

C) $6,000; Yes

D) $5,400; Yes

E) No side effect.