What is the change in the NPV of a one-year project if fixed costs are increased from $400 to $600, the firm is profitable, has a 35% tax rate, and employs a 12% cost of capital?
A) -$200.00
B) -$178.57
C) -$130.00
D)-$116.07

Name: What is the change in the NPV of a one-year project if fixed costs are increased from $400 to $600, the firm is profitable, has a 35% tax rate, and employs a 12% cost of capital? A) -$200.00 B) -$178.57 C) -$130.00 D)-$116.07
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Question

Quizplus · Accepted Answer

ΔNPV = (-$600 + 400)(1 - .35)/1.12 = -$116.07

What Is the Change in the NPV of a One-Year