a) A new (2 year) project would require the purchase of new equipment today at a cost of $13,000. The equipment would be depreciated on a straight-line basis over its 2-year useful life to a book value of $4000. At the end of the life of the project (at the year 2 point), the machine will be sold for an estimated $1000. The project will cause an increase in Sales of $11,000 in each of years 1 and 2, and an increase in operating expenses of $5000 in each of years 1 and 2. The project will require an increase in Inventory of $1600 and an increase in Accounts Payable of $800 up front (year 0). These accounts are expected to gradually return to their pre-project levels over the 2-year life of the project. The firm's marginal tax rate is 30%, and its WACC is 10%. The NPV of this project is $_________. Round final answer to two decimal places.

b)For the previous question, fill in the blanks for the following select components of the problem. Be sure to include a negative sign if appropriate.

The net cash flow effect related to net working capital in year 0 is $ ___.

The net cash flow effect related to net working capital in each of years 1 and 2 is $ ___ per year.

The net after-tax salvage value related to the equipment sale in year 2 is $ ___ .

The depreciation tax shield amount in each of years 1 and 2 is $ ___ per year. Based on your analysis, should this project be accepted? YES or NO