1. XYZ is evaluating the Reno project. The project would require an initial investment of $129,000 that would be depreciated to $16,200 over 6 years using straight-line depreciation. The project is expected to have operating cash flows of $47,300 per year forever. XYZ expects the project to have an after-tax terminal value of $331,000 in 3 years. The tax rate is 30%. What is (X+Y)/Z if X is the project's relevant expected cash flow in year 3, Y is the project's relevant expected cash flow in year 4, and Z is the project's relevant expected cash flow in year 2?

   		A number less than 7.50 or a rate greater than 15.18
   		A number equal to or greater than 7.50 but less than 9.53
   		A number equal to or greater than 11.79 but less than 13.40
   		A number equal to or greater than 13.40 but less than 15.18
   		A number equal to or greater than 9.53 but less than 11.79