Q1. Taufel, Inc. is considering implementing a cost-cutting project. The pre-tax cost reduction is expected to be $18,000 for each of the three years of the project's life. The project has an initial cost of $40,000 and belongs in a 20% CCA class. The company has a tax rate of 32% and the discount rate for the project is 9%. The project can be sold to another company at the end of year 3 for $2,000. What is the NPV of the project?

options:

$750

$700

$675

$650

$625

Q2. Taufel, Inc. is considering implementing a cost-cutting project. The pre-tax cost reduction is expected to be $13,000 for each of the four years of the project's life. The project has an initial cost of $36,500 and belongs in a 30% CCA class. The company has a tax rate of 32% and the discount rate for the project is 12%. The project can be sold to another company at the end of year 4 for $5,000. What is the NPV of the project?

options:

$697

$709

$723

$759

$778