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Determine the net present value of this asset

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Question - Darlington Company is considering investing in an equipment, which will increase yearly cash revenues by $65000, and yearly cash expenses to operate the equipment by $30,000. The asset will cost $200,000, and will last 8 years, with a salvage value of $40,000. Assuming a tax rate of 39%, determine the net present value of this asset, if the company requires a 10% return on investments.

A. ($5,405)

B. ($25,804.75)

C. 25, 804.75

D. $5,405

Reference no: EM131969024

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