A company will sell Widgets to consumers at a price of $$93$ per unit. The variable cost to produce Widgets is $$41$ per unit. The company expects to sell $20,000$ Widgets to consumers each year. The fixed costs incurred each year will be $$250,000.$ There is an initial investment to produce the goods of $$3,800,000$ which will be depreciated straight line over the $10$ year life of the investment to a salvage value of $$0.$ The opportunity cost of capital is $12\%$ and the tax rate is $31\%.$

What is operating cash flow each year?

Correct response: $662,900+-1$

Using the an annual operating cash flow of $$662,900,$ what is the net present value of this investment?

Correct response: $-54,467\mathrm{.}15+-100$

Should the company accept or reject this project?

Reject

Accept

Correct response: Reject

Answer the question beneath please.

What is the net present value of the project if inventories must be increased at the start of the project $($year $0)$ by $$750,000$ and will be recovered at the end$($year $10),$ given that the NPV of the project ignoring changes in net working capital is $$-54,467\mathrm{.}15?$