A company is considering a 3-year project with an initial co

Assignment Help Finance A company is considering a 3-year project with an initial co

Finance

A company is considering a 3-year project with an initial co

A company is considering a 3-year project with an initial cost of $960,000. The project will not dir… Show more A company is considering a 3-year project with an initial cost of $960,000. The project will not directly produce any sales but will reduce operating costs by $500,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $143,000. The tax rate is 34 percent. The project will require $26,000 in extra inventory for spare parts and accessories. Should this project be implemented if its requires a rate of return of 14 percent? Why or why not? A. no; the NPV is $139,985.20 B. yes; The NPV is $130,957.13 C. yes; The NPV is $113,985.2 D. no. The NPV is -$112,285.2 • Show less

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