Bruno's Lunch Counter is expanding and experts operating cash flows of $27,500 a year for 4 years as a result. This expansion requires $38,000 in new fixed assets. These assets will have a salvage value at the end of the project of $1,000. In addition, the project requires $ $2,500 of net working capital throughout the life of the project.All net working capital will be recovered at the end of the project. What is the net present value of this expansion project at a required rate of return of 11 percent if the tax rate is 35%?
a. $46,892.26
b. $32,234.21
c. $11,003.76
d. $54,537.63