Question: Silver Sun Aviation is considering a project that would last for 2 years and have a cost of capital of 17.06 percent. The relevant level

Silver Sun Aviation is considering a project that would last for 2 years and have a cost of capital of 17.06 percent. The relevant level of net working capital for the project is expected to be 16,000 dollars immediately (at year 0); 12,000 dollars in 1 year; and 0 dollars in 2 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, and 2 are presented in the following table (in dollars). The tax rate is 50 percent. What is the net present value of this project?

Year 0

Year 1

Year 2

Revenue

$0

186,000

186,000

Costs

$0

62,000

62,000

Depreciation

$0

49,000

49,000

Cash flows from capital spending

-100,000

0

16,000

there's a table with all the values above

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