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2. Your company is considering the purchase of a new production system with an installed cost of $1,250,000. The cost will be depreciated on a

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2. Your company is considering the purchase of a new production system with an installed cost of $1,250,000. The cost will be depreciated on a straight-line basis to zero over the five-year life of the project, and the system can be sold at the end of the project for $225,000. It will provide additional revenue of $685,000 in the first year, and the additional revenue is expected to grow 5% per year thereafter. The associated cost of goods sold is estimated to be 30% of revenue, and other operating expenses are estimated to be 23% of revenue. The project will also require an initial working capital investment of $180,000, which will be recovered at the end of the project. If the tax rate is 21% and the required rate of return is 10%, what is the NPV of this project

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