Question: A two-year project has been evaluated and has an NPV on an after tax basis of -$2000. On reviewing the analysis the Finance Manager found

A two-year project has been evaluated and has an NPV on an after tax basis of -$2000. On reviewing the analysis the Finance Manager found that depreciation had been omitted from the tax analysis. The allowable depreciation for tax purposes is $5000 for each year. Using a tax rate of 30% and and a discount rate after tax of 12% pa, determine the correct NPV for the project (to the nearest dollar).

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