Answer:
Net Present Value: 1,661,452,09
Explanation:
The net present value is the presetn value of the revenues less the cost from the company:
revenue: 435,000
interest expense:
250,000 x .073 = <u> (18,250) </u>
net income: 416,750
<u>after tax:</u> 416,750 x (1 - 21%) = 329,232.5
<u>present value</u> of the project (per perpetuity)
329,252.5 / 0.167 = 1,971,452.09
less the cash cost: (310,000)
Net Present Value: 1,661,452,09