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Gateway Communications is considering a project with an initial fixed assets cost of $1.59 million that...

Gateway Communications is considering a project with an initial fixed assets cost of $1.59 million that will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project the equipment will be sold for an estimated $236,000. The project will not change sales but will reduce operating costs by $385,500 per year. The tax rate is 21 percent and the required return is 11.1 percent. The project will require $50,000 in net working capital, which will be recouped when the project ends. What is the project's NPV?  

A) $196,454

B) $424384

C) $203,003      

D) $188,898     

E) $149,552

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jeff jeffy answered 1 year ago
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