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XYZ is considering a project that would last for 3 years and have a cost of capital of 22.10 percent. The relevant level of net
XYZ is considering a project that would last for 3 years and have a cost of capital of 22.10 percent. The relevant level of net working capital for the project is expected to be $1,917.30 immediately (at year 0); $4,620.00 in 1 year; $13,100.00 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 52.80 percent. What is the net present value of this project?. Year 0 Year 1 Year 2 Year 3 $13,700.00 $13,200.00 $12,200.00 Revenue $ 0.00 $ 0.00 Costs $3,900.00 $3,950.00 $3,800.00 Depreciation $ 0.00 $1,540.00 $2,020.00 $2,600.00 Cash flows from capital spending $-6,140.00 $ 120.00 $1,560.00 $3,240.00 O $5192.76 (plus or minus $10) O $8408.18 (plus or minus $10) O $1148.24 (plus or minus $10) O $10437.42 (plus or minus $10) O None of the above is within $10 of the correct
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