Wedge Corporation uses a discount rate of 14% and has a tax rate of 30%. The following cash flows occur in the last year of a 10-year equipment selection investment project:
- Cost savings for the year = $180,000
- Working capital released = $120,000
- Salvage value of equipment = $25,000
At the end of the ten years when the equipment is sold, its net book value for tax purposes is zero. The total after-tax present value of the cash flows above is closest to:
A. $45,765
B. $48,465
C. $61,425
D. $71,145