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Naomi Brown is reviewing a capital budgeting proposal from AVA, Inc. AVA is considering investing...

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Accounting

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Naomi Brown is reviewing a capital budgeting proposal from AVA, Inc. AVA is considering investing in new equipment. The details of the proposal are as follows: The net investment outlay is $580,000. The investment will generate $275,500 in after-tax incremental cash flow at the end of each of the next 5 years. At the end of the fifth year, there will be an after-tax terminal cash flow of $138,500 The weighted average cost of capital for this project is 12%. The net present value of the investment is closest to: A $483,284 B$491,704 C $1,651,704

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