A company estimates they will sell 100,000 units (@$10/unit) of a new product every year for four years, starting from year 0. Fixed costs are $400,000 annually. Variable costs are $5/unit. All sales, variable and fixed costs are cash. The new machinery to manufacture the product will cost $360,000 in year 0 and be depreciated straight line over the next three years to a zero salvage value. At the end of the project the machinery will be sold for $50,000 and no new sales will occur. The tax rate is 34%. What is the NPV (in year 0) if the project has a 6% OCC?

$19,185

$36,794

$59,400