Question: XYZ is evaluating the Reno project. The project would require an initial investment of $150,000 that would be depreciated to $17,000 over 6 years using

XYZ is evaluating the Reno project. The project would require an initial investment of $150,000 that would be depreciated to $17,000 over 6 years using straight-line depreciation. The project is expected to have operating cash flows of $50,700 per year forever. XYZ expects the project to have an after-tax terminal value of $329,000 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 6, and Z is the project's relevant expected cash flow in year 2?

A number equal to or greater than 14.38 but less than 16.44

O A number equal to or greater than 9.14 but less than 12.07

O A number equal to or greater than 12.07 but less than 14.38

A number less than 6.99 or a rate greater than 16.44
A number equal to or greater than 6.99 but less than 9.14

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