Thomson Media is considering some new equipment whose data are shown below. The equipment has a 3-year tax life. Under the new tax law, the equipment is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The equipment would have a positive pre-tax salvage value at the end of Year 3, when the project would be closed down. Also, additional net operating working capital (NOWC) would be required, but it would be recovered at the end of the project's life. Revenues and operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number.

WACC	10.0%
Equipment cost	$101,000
Required net operating working capital (NOWC)	$12,000
Annual sales revenues	$73,000
Annual operating costs	$26,000
Expected pre-tax salvage value	$5,000
Tax rate	25.0%

a. $9,491

b. $11,912

c. $11,745

d. $12,684

e. $7,426

Zorn Corporation is deciding whether to pursue a restricted or relaxed working capital investment policy. The firm's annual sales are expected to total $5,280,000, its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. EBIT is $191,000, the interest rate on the firm's debt is 8%, and the tax rate is 40%. If the company follows a restricted policy, its total assets turnover will be 2.5. Under a relaxed policy its total assets turnover will be 2.2.

What's the difference in the projected ROEs under the restricted and relaxed policies? Do not round intermediate calculations.