In: Finance
NBA stars Kevin Durant and Chris Paul own a company that faces a 40% tax rate and uses a 14% discount rate. They just invested $677,000 in equipment for the banking app “Goalsetter” that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will be salvaged for $182,000 at the end of the project. Kevin Durant and Chris Paul know that the project's operating cash flow will be $165,300 per year. What is the NPV of this project if it requires $52,000 initially for net working capital, which will be recovered at the end of the project?
a. −$15,126
b. −$12,763
c. −$11,486
d. –$13,614
e. −$16,290