Question: A firm is analyzing a project that is expected to have annual sales of $850 and annual cost of goods sold of $580. To undertake

A firm is analyzing a project that is expected to have annual sales of $850 and annual cost of goods sold of $580. To undertake the project a firm must invest $720 in a fixed asset at the beginning of the project. The fixed asset will be depreciated straight line to zero over the four year life of the project. The asset will have no salvage value. this asset will cause the firm to increase investment and networking capital by $130. When the project is undertaken investment and networking capital will be reserved in the projects and the tax rate is 30% and the discount rate is 12% find the net present value of the project. A. $125 B. $220 C. $148 D. $65 E. -$120 F. -$29

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