Chene Corporation has provided the following information concerning a capital budgeting project:
The equipment will have a 4 year expected life and zero salvage value.The company's income tax rate is 35% and the after-tax discount rate is 10%.The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $50,000.Assume cash flows occur at the end of the year except for the initial investments.The company takes income taxes into account in its capital budgeting.
The net present value of the project is closest to:
A) $323,238
B) $208,000
C) $211,970
D) $123,238

Question

Chene Corporation has provided the following information concerning a capital budgeting project:
 The equipment will have a 4 year expected life and zero salvage value.The company's income tax rate is 35% and the after-tax discount rate is 10%.The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $50,000.Assume cash flows occur at the end of the year except for the initial investments.The company takes income taxes into account in its capital budgeting.
The net present value of the project is closest to:
A) $323,238 
B) $208,000 
C) $211,970 
D) $123,238

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11ea7761_15d2_a2b1_81a5_7916cfa704a2_TB2580_00

Chene Corporation Has Provided the Following Information Concerning a Capital