ABC Company is considering manufacturing a new style of shirt, whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its 5-year life and would have a zero-salvage value and would require additional NWC by $2,500. Revenues and other operating costs are expected to be constant over the projects 5-year life. However, this project would compete with other Westons products and would reduce their pre-tax annual cash flows. What is the projects NPV?

WACC 10.0%

Pre-tax cash flow reduction for other products $5,000

Investment cost (depreciable basis) $80,000

Shipping and Installation cost $10,000

Sales revenues, each year for 5 years $70,000

Annual operating costs (excl. deprec.) $35,000

Tax rate 35%