A company is considering a 3-year project that requires an initial installed equipment cost of $10,000....

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A company is considering a 3-year project that requires aninitial installed equipment cost of $10,000. The project engineerhas estimated that the operating cash flows will be $4,000 in year1, $6,000 in year 2, and $8,000 in year 3. The new machine willalso require a parts inventory of $3,000 at the beginning of theproject (assume this inventory can be sold for cost at the end ofthe project). It is also estimated that the equipment can be soldas salvage for an after tax salvage cash flow of $4,000 at the endof the project. If the tax rate is 35% and the required rate ofreturn is 18%, what is the net present value (NPV) of this project?(Answer to the nearest dollar.)

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Initial Investment for the Project Initial Investment for the Project Cost of the Equipment Working capital required in Inventory 10000 3000 13000 Annual Cash See Answer

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A company is considering a 3-year project that requires aninitial installed equipment cost of $10,000. The project engineerhas estimated that the operating cash flows will be $4,000 in year1, $6,000 in year 2, and $8,000 in year 3. The new machine willalso require a parts inventory of $3,000 at the beginning of theproject (assume this inventory can be sold for cost at the end ofthe project). It is also estimated that the equipment can be soldas salvage for an after tax salvage cash flow of $4,000 at the endof the project. If the tax rate is 35% and the required rate ofreturn is 18%, what is the net present value (NPV) of this project?(Answer to the nearest dollar.)