1.Jacklyn Inc. has an opportunity to sell a newly developed product in Cebu for a period of five years. The product license would be purchased for Mira Company. Jacklyn would be responsible for all distribution and product promotion costs. Mira has the option to renew the agreement, with modifications, at the end of the initial five year term. Jacklyn has developed the following estimated revenues and costs that would be associated with the new product.

Cost of new equipment required

P120,000

Additional working capital required

200,000

Salvage value of equipment in Year 5

20,000

Annual revenues and costs:

Sales revenues

400,000

Cost of goods sold

250,000

Out of pocket operating cost

70,000

The working capital required to support the new product would be released for investment elsewhere if the product licensing agreement is not renewed. Ignoring income tax effects, and assuming a 20% cost of capital, what is the NPV of this project?