Apple Company is reviewing an investment proposal. The initial cost as well as the estimate of the book value of the investment at the end of each year, the net after-tax cash flows for each year, and the net income for each year are presented in the following schedule. The salvage value of the investment at the end of each year is equal to its book value. There would be no salvage value at the end of the investments life.

Annual Net After-Tax Cash Flows Annual Net Income Year 0 Initial Cost and Book Value $ 165,000 110,000 66,000 33,000 11,000 0 2 3 $ 78,000 69,000 60,000 51,000 42,000 $23,000 25,000 27,000 29,000 31,000 5 Management uses a 18 percent after-tax target rate of return for new investment proposals. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) 3. Compute the proposal's net present value. Net present value