(Appendix 8C)Zangari Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment.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 entire project is closest to:
A)$47, 047
B)$115, 500
C)$327, 047
D)$175, 500

Question

(Appendix 8C)Zangari Corporation has provided the following information concerning a capital budgeting project:  The company uses straight-line depreciation on all equipment.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 entire project is closest to:
A)$47, 047 
B)$115, 500 
C)$327, 047 
D)$175, 500

Quizplus · Accepted Answer

Depreciation expense = (Original cost - Salvage value)÷ Useful life
= ($280, 000 - $0)÷ 4 years = $70, 000 per year
 11eaa0c8_96cd_bb88_9cb2_b36d5d1a2bf8_TB2487_00

(Appendix 8C)Zangari Corporation Has Provided the Following Information Concerning a Capital