Gateway Communications is considering a project with an initial fixed assets cost of $1.71 million that...

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Gateway Communications is considering a project with an initialfixed assets cost of $1.71 million that will be depreciatedstraight-line to a zero book value over the 10-year life of theproject. At the end of the project the equipment will be sold foran estimated $229,000. The project will not change sales but willreduce operating costs by $382,000 per year. The tax rate is 35percent and the required return is 10.4 percent. The project willrequire $46,500 in net working capital, which will be recouped whenthe project ends. What is the project's NPV?

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Gateway Communications is considering a project with an initialfixed assets cost of $1.71 million that will be depreciatedstraight-line to a zero book value over the 10-year life of theproject. At the end of the project the equipment will be sold foran estimated $229,000. The project will not change sales but willreduce operating costs by $382,000 per year. The tax rate is 35percent and the required return is 10.4 percent. The project willrequire $46,500 in net working capital, which will be recouped whenthe project ends. What is the project's NPV?