Today ABC Corp. starts a project that requires it to invest in new equipment of $826,000. Doing so will earn ABC pre-tax cash flows of $153,000 annually over 8 years. The equipment has a salvage value of $127,000. ABC's cost of capital is 9.20%, and its tax rate is 35%. The equipment falls into the 20% CCA class (half year rule applies). What is the NPV of the project?
Question 11Answer

a.
$174,615

b.
-$105,015

c.
-$216,821

d.
-$42,206

e.
-$27,149