20 You were tasked to evaluate an expansion project and you collected the following information: Initial investment is

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20 You were tasked to evaluate an expansion
project and you collected the following information: Initial
investment is $1.2m. Your annual EBIT is going to be $500,000,
which is net of depreciation of $150,000 and before tax, whereby
your corporate tax rate is 21%. At the project start, you need to
build up net working capital to a level $100,000, and at project
end, in 3 years, you will release that net working capital again
and you are expected to recover the full $100,000. There are no
other salvage value considerations for this project. Assuming a
risk-adjusted discount rate of 10%, the net present value of this
project equals…
Select one:
a.1,155,669
b.-144,331
c.130,466
d.-44,331