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Gateway Communications is considering a project with an initial fixed asset cost of $2.46 million which...

Gateway Communications is considering a project with an initial fixed asset cost of $2.46 million which will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project the equipment is scrapped. The project will increase pre-tax revenues to the firm by $725,000 a year. The tax rate is 35 percent. If the firm requires a 16 percent rate of return what is the Net Present Value of this project?

$233,799.34

-$172,937.49

-$87,820.48

$337,210.69

$447,202.05

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