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XYZ is considering a project that would last for 3 years and have a cost of capital of 22.30 percent. The relevant level of net
XYZ is considering a project that would last for 3 years and have a cost of capital of 22.30 percent. The relevant level of net working capital for the project is expected to be $1,545.00 immediately (at year 0); $4,500.00 in 1 year; $14,800.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 45.50 percent. What is the net present value of this project?. Year 0 Year 1 Year 3 Year 2 $10,700.00 $10,700.00 $10,300.00 Revenue $ 0.00 $ 0.00 Costs $3,780.00 $3,690.00 $4,800.00 Depreciation $ 0.00 $1,840.00 $1,870.00 $1,600.00 Cash flows from capital spending $-6,710.00 $1,820.00 $ 570.00 $3,680.00 O $8855.75 (plus or minus $10) O $6171.13 (plus or minus $10) O $3342.08 (plus or minus $10) O $-287.30 (plus or minus $10) O None of the above is within $10 of the correct
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