Shinoda Manufacturing, Incorporated, has been considering the purchase of a new manufacturing facility for...

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Accounting

Shinoda Manufacturing, Incorporated, has been considering the purchase of a new
manufacturing facility for $460,000. The facility is to be fully depreciated on a straight-
line basis over seven years. It is expected to have no resale value at that time. Operating
revenues from the facility are expected to be $370,000, in nominal terms, at the end of
the first year. The revenues are expected to increase at the inflation rate of 5 percent.
Production costs at the end of the first year will be $215,000, in nominal terms, and they
are expected to increase at 6 percent per year. The real discount rate is 8 percent. The
corporate tax rate is 22 percent. Calculate the NPV of the project. (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
NPV
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