We expect a project to pay $1,000 at the end of each year for 5 years.   The project requires that we purchase an asset that costs $2,000.  The asset depreciates straight line over the 5 years.  The tax rate is 30 percent.

We expect a project to pay $1,000 at the end of each year for 5 years.   The project requires that we purchase an asset that costs $2,000.  The asset depreciates straight line over the 5 years.  The tax rate is 30 percent.
The discount rate is 10 percent.
 
What is the net present value of the project?

$5,581

1,108

$1,781

$3,000

 
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