Question: We expect a project to pay $1,000 at the end of each year for 5 years. The project requires that we purchasean asset that costs

We expect a project to pay $1,000 at the end of each year for 5 years. The project requires that we purchasean asset that costs $2,000. The asset depreciates straight line over the 5 years. The tax rate is 30 percent.

The discount rate is 10 percent.

What is the net present value of the project?

$5,581

1,108

$1,781

$3,000

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