Question $21$

Jasper Metals is considering installing a new molding machine which is expected to produce

operating cash flows of $$73,000$ a year for $4$ years. The project will require $$10,000$ of net

working capital which will be recouped when the project ends. The initial cost of the

molding machine is $$149,000.$ The equipment will be depreciated straight$-$line to a zero

book value over the life of the project. The equipment will be salvaged at the end of the

project creating a $$48,000$ aftertax cash flow. What is the net present value of this project

given a required return of $14\mathrm{.}5$ percent?

$$81,140\mathrm{.}34$

$$82,542\mathrm{.}62$

$$85,283\mathrm{.}88$

$$85,830\mathrm{.}49$