Jennifer K. is analyzing a project and has determined that the initial cost will be $1,519,000...

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Jennifer K. is analyzing a project and has determined that theinitial cost will be $1,519,000 and the required rate of returnneeds to be 14 percent. The project has a 60 percent chance ofsuccess and a 40 percent chance of failure. If the project fails,it will generate an annual after-tax cash flow of $261,000. If theproject succeeds, the annual after-tax cash flow will be $684,000.She has further determined that if the project fails, she will shutit down after the first year and sell the equipment for theafter-tax salvage value of $530,000. If however, the project is asuccess, she can expand it with no additional investment andincrease the after-tax cash flow to $712,000 a year for Years 2-5.At the end of Year 5, the project would be terminated and have nosalvage value. What is the expected net present value of thisproject at Time 0? $210,419.21 $176,737.63 $235,844.96 $229,842.11$185,006.33

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Jennifer K. is analyzing a project and has determined that theinitial cost will be $1,519,000 and the required rate of returnneeds to be 14 percent. The project has a 60 percent chance ofsuccess and a 40 percent chance of failure. If the project fails,it will generate an annual after-tax cash flow of $261,000. If theproject succeeds, the annual after-tax cash flow will be $684,000.She has further determined that if the project fails, she will shutit down after the first year and sell the equipment for theafter-tax salvage value of $530,000. If however, the project is asuccess, she can expand it with no additional investment andincrease the after-tax cash flow to $712,000 a year for Years 2-5.At the end of Year 5, the project would be terminated and have nosalvage value. What is the expected net present value of thisproject at Time 0? $210,419.21 $176,737.63 $235,844.96 $229,842.11$185,006.33