Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...

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Dickinson Brothers, Inc., is considering investing in a machineto produce computer keyboards. The price of the machine will be$1,600,000, and its economic life is five years. The machine willbe fully depreciated by the straight-line method. The machine willproduce 25,000 keyboards each year. The price of each keyboard willbe $54 in the first year and will increase by 6 percent per year.The production cost per keyboard will be $24 in the first year andwill increase by 3 percent per year. The project will have anannual fixed cost of $275,000 and require an immediate investmentof $240,000 in net working capital. The corporate tax rate for thecompany is 23 percent. The appropriate discount rate is 11 percent.What is the NPV of the investment?

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Dickinson Brothers, Inc., is considering investing in a machineto produce computer keyboards. The price of the machine will be$1,600,000, and its economic life is five years. The machine willbe fully depreciated by the straight-line method. The machine willproduce 25,000 keyboards each year. The price of each keyboard willbe $54 in the first year and will increase by 6 percent per year.The production cost per keyboard will be $24 in the first year andwill increase by 3 percent per year. The project will have anannual fixed cost of $275,000 and require an immediate investmentof $240,000 in net working capital. The corporate tax rate for thecompany is 23 percent. The appropriate discount rate is 11 percent.What is the NPV of the investment?