What is the npv of the project this project does not create, Financial Management

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What is the npv of the project this project does not create

You are considering the following project. What is the NPV of the project?

Project life: 3 years

Equipment:

Cost: $18,000

Economic life: 3 years

Salvage value: $4,000

Initial investment in net working capital: $2,000

Revenue: $13,000 in year 1, with a nominal growth rate of 5% per year

Fixed cost: $3,000 in year 1

Variable cost: 30% of revenue

Corporate tax rate (T): 40%

WACC for the project: 10%

This project does not create incidental effect.

a. -$1,338.68

b. -$1,286.65

c. -$1,261.12

d. -$1,310.09

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Financial Management: What is the npv of the project this project does not create

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