Project Beta is a 4-year project which requires an initial outlay of $6,000. This outlay will be depreciated using straight-line depreciation over the life of the project. It will generate incremental revenue of $6000 per year. The value of incremental, after-tax earnings is $1998 per year. The project will require Net Working Capital equal to 15% of incremental revenue.

What is the value of incremental free cash flow in Years 1 to 4?

a.

$498

b.

$-498

c.

$-3498

d.

$3498

Clear my choice