As the finance manager of a company, you are presented with the following project. The company is considering the purchase of a new piece of equipment which would cost $210,000. This equipment will have a five-year useful life and have a salvage value of $10,000 at the end of the five-year period. Assume straight-line depreciation It is estimated that the new equipment will be able to produce 10,000 shelves per year. the allocated overhead for running the equipment will be $20,000 per year. they can sell the shelves for $25 each. the cost of sales is $15 per shelf. Net Working Capital requirements for the project are as follows: Year 0 = $10,000 Year 1 = $15,000 Year 2 = $17,000 Year 3 = $15,000 Year 4 = $10,000 The company has a 30% marginal tax rate and a required rate of return of 15%.

1.What is the NPV for the project?-Need confirmation that NPV is 16,204.

2. The company has a preexisting line ofshelves that sell for $25 per unit with a unit cost of $15. You estimate that sales forthis preexisting line will be 500 units lower each year (not cumulative) as long asthe new line of shelves is in production.What is the new NPV?