Delia Landscaping is considering a new 4-year project. The necessary fixed be depreciated on a 3-year MACRS and have no salvage value. The MACRS 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. T sales of $100,000, variable costs of $27,450, and fixed costs of $12,050. The working capital of $2,650 that will be returned at the end of the project. The percent and the project's required return is 11 percent. What is the net prese Multiple Choice

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $163,000 and
be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are
33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual
sales of $100,000, variable costs of $27,450, and fixed costs of $12,050. The project will also require net
working capital of $2,650 that will be returned at the end of the project. The company has a tax rate of 21
percent and the project's required return is 11 percent. What is the net present value of this project?
Multiple Choice
$6,223
$2,961
$4,140
$12,382
$2,714
Transcribed Image Text:Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $163,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $100,000, variable costs of $27,450, and fixed costs of $12,050. The project will also require net working capital of $2,650 that will be returned at the end of the project. The company has a tax rate of 21 percent and the project's required return is 11 percent. What is the net present value of this project? Multiple Choice $6,223 $2,961 $4,140 $12,382 $2,714
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