Finco Inc. manufactures financial calculators. The company isdeciding whether to introduce a new calculator. This calculatorwill sell for $100. The company feels that sales will be 12,500,13,000, 14,000, 13,200, and 12,500 units per year for the next 5years. Variable costs will be 25% of sales, and fixed costs are$300,000 per year. The firm hired a marketing team to analyze theviability of the product and the marketing analysis cost$1,500,000. The company plans to use a vacant warehouse tomanufacture and store the calculators. Based on a recent appraisalthe warehouse and the property is worth $2.5 million on anafter-tax basis. If the company does not sell the property todaythen it will sell the property 5 years from today at the currentlyappraised value. This project will require an injection of networking capital at the onset of the project in the amount of$100,000. This networking capital will be fully recovered at theend of the project. The firm will need to purchase some equipmentin the amount of $1,200,000 to produce the new calculators. Themachine has a 7-year life and will be depreciated using thestraight-line method. At the end of the project, the anticipatedmarket value of the machine is $150,000. The firm requires a 10%return on its investment and has a tax rate of 21%.

Calculate the after tax salvage value at theend of year 5. (Round to two decimals)

Calculate the operating cash flows at the endof year 1. (Round to two decimals)

Calculate the initial cash outflow (e.g. thetime 0 cash flow). (Enter a negative value and round to twodecimals)

Calculate the cash flow from assets at the endof year 5. (Round to two decimals)

Calculate the net present value for theproject. (Round to 2 decimals)