Question: XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $46,000. It would be depreciated straight-line to

XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $46,000. It would be depreciated straight-line to $0 over 2 years. In 2 years, the system would be sold for an after-tax cash flow of $13,000. Without the system, costs are expected to be $100,000 in 1 year and $100,000 in 2 years. With the system, costs are expected to be $75,000 in 1 year and $65,000 in 2 years. If the tax rate is 50% and the cost of capital is 8.3%, what is the net present value of the new interception system project?

A. $11,970 (plus or minus $50)

B. $16,103 (plus or minus $50)

C. $886 (plus or minus $50)

D. $47,843 (plus or minus $50)

E. None of the above is within $50 of the correct answer

Do not make chart or use excel please d the simple work

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