XYZ is evaluating a 3-year project that would involve buying a new piece of equipment for $240,000 today. The equipment would be depreciated straight-line to $0 over 2 years. In 3 years, the equipment would be hauled away for an after-tax cash flow of $0. In each of the 3 years of the project, relevant annual revenues are expected to be $157,000 and relevant annual costs are expected to be $23,000. The tax rate is 50% and the cost of capital for the project is 11%? What is the net present value of the project?

$26,480 (plus or minus $100)

$70,352 (plus or minus $100)

$21,477 (plus or minus $100)

$123,478 (plus or minus $100)

None of the above is within $100 of the correct answer