As the financial analyst at a manufacturing company, you need to assess a project proposal to upgrade the company$$s communication equipment. You have the following information:

Purchase of new equipment

$$500,000$

Shipping and installation costs

$$20,000$

Additional working capital required

$$5,000$

Project incremental annual revenues $($pre$-$tax$)$

$$300,000$

Project incremental annual expenses $($pre$-$tax$)$

$$180,000$

R & D costs $($incurred two years ago$)$

$$15,000$

Tax rate

$25\%$

Discount rate

$7\%$

Project life

$5$ years

Salvage value $($not the last asset in the class$)$

$$40,000$

Annual interest cost on debt taken on to purchase of the equipment

$$5000$ per year

Working capital released at end of project

$$5,000$

Capital cost allowance $($CCA$)$ rate

$20\%$

Using the information provided, calculate the net present value $($NPV$)$ of the proposed project.