Question: Thornley Machines Is consldering a 3-year project with an Initial cost of $660,000. The project will not directly produce any sales but wil educe operating

Thornley Machines Is consldering a 3-year project with an Initial cost

Thornley Machines Is consldering a 3-year project with an Initial cost of $660,000. The project will not directly produce any sales but wil educe operating costs by $400,000 a year. The equipment is depreclated straight-line to a zero book value over the life of the project. At the end of the project the equlpment will be sold for an estimated $72,000. The tax rate Is 34 percent The project will require $16,000 In extra Inventory for spare parts and accessories. Should this project be Implemented If Thornley's requires a rate of return of 12 percent? Why or why not? no; The NPV is $198,952.72 O yes; The NPV is $88,246.08 O yes The NPV is $182,95272 O yes: The NPV is $137,120.00 O yes: The NPV is $245,092.47

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