What is the NPV of the mall project? The project would require an initial investment in equipment of $93,200.00 and would last for either 3 years or 4 years (the date when the project ends will not be known until it happens and that will be when the equipment stops working in either 3 years from today or 4 years from today). The first annual operating cash flow of $45,600.00 is expected in 1 year, and annual operating cash flows of $45,600.00 per year are expected each year until the project ends in either 3 years or 4 years. In 1 year, the project is expected to have an after-tax terminal value of $81,100.00. The cost of capital for this project is 15.71 percent.
a. $16,297.88 (plus or minus $10)
b. $62,050.34 (plus or minus $10)
c. - $19,732.83 (plus or minus $10)
d. $40,840.17 (plus or minus $10)
e. None of the above is within $10 of the correct answer