The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent...

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The Bruin's Den Outdoor Gear is considering a new 7-year projectto produce a new tent line. The equipment necessary would cost$1.95 million and be depreciated using straight-line depreciationto a book value of zero. At the end of the project, the equipmentcan be sold for 15 percent of its initial cost. The companybelieves that it can sell 30,500 tents per year at a price of $78and variable costs of $37 per tent. The fixed costs will be$535,000 per year. The project will require an initial investmentin net working capital of $249,000 that will be recovered at theend of the project. The required rate of return is 12.1 percent andthe tax rate is 34 percent. What is the NPV?

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The Bruin's Den Outdoor Gear is considering a new 7-year projectto produce a new tent line. The equipment necessary would cost$1.95 million and be depreciated using straight-line depreciationto a book value of zero. At the end of the project, the equipmentcan be sold for 15 percent of its initial cost. The companybelieves that it can sell 30,500 tents per year at a price of $78and variable costs of $37 per tent. The fixed costs will be$535,000 per year. The project will require an initial investmentin net working capital of $249,000 that will be recovered at theend of the project. The required rate of return is 12.1 percent andthe tax rate is 34 percent. What is the NPV?