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Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing...

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Accounting

Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing $679,000 that would be depreciated on a straight-line basis to zero over the 4-year life of the project. The equipment will have a market value of $183,000 at the end of the project. The project requires $53,000 initially for net working capital, which will be recovered at the end of the project. The operating cash flow will be $202,900 a year. What is the net present value of this project if the relevant discount rate is 13 percent and the tax rate is 21 percent?

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