Question: Simpson Enterprises is considering a new project with cash inflows of $325,000 for the indefinite future. Cash costs are 63 percent of the cash inflows.

Simpson Enterprises is considering a new project with cash inflows of $325,000 for the indefinite future. Cash costs are 63 percent of the cash inflows. The initial cost of the investment is $425,000. The tax rate is 35 percent and the unlevered cost of equity is 17 percent. What is the net present value of the project?

a

$34,779.41
b

$44,347.48
c

$78,162.50
d

$204,584.78
e

$121,089.16

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