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Shultz Business Systems is considering a new distribution center which is deemed an average-risk project....

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Finance

Shultz Business Systems is considering a new distribution center which is deemed an average-risk project. After-tax annual cash flows are estimated at $25,000/year. The firm will use an empty building that could be sold today for $10,000 after-tax. Net working capital of $20,000 will be required. The project should last for 3 years and the building could be sold then for $15,000 net of tax. What are the total incremental cash flows at year 0 and year 3?

A. -$30,000; $60,000

B. -$30,000; $40,000

C. -$20,000; $45,000

D. -$20,000;$60,000

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