A machine costs $100,000 to purchase. In addition a further $20,000 working capital will be required at the start of the project. The project is expected to last 4 years and to have a scrap value of $20,000 at the end of its useful life. Net operating cash flows are expected to be $30,000 p.a. for the first 2 years and $40,000 p.a. for the following years. All operating cash flows are to be assumed to occur at the ends of year. Assume that the cost of capital is 10%.

Required

Determine the NPV of the project.