What is the net present value for this project

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Phone home inc. is considering a new 4 year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to 0 over it's 4 year tax life, after which time it will have a market value of $225,000. The project requires an initial investment in net working capital of $330,000, all of which will be recovered at the end of the project. The project is estimated to generate $2,640,000 in annual sales, with costs of $1,056,000. The tax rate is 33% and the required return for the project is 15%. What is the net present value for this project?

A. 742,208

B. 741,335

C. 681,409

D. 744,595

Reference no: EM13768895

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