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Assume that your company is considering a 4 -year project and that the proposed project has the following features: - Projected sales are: Year 1=$5,000,000

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Assume that your company is considering a 4 -year project and that the proposed project has the following features: - Projected sales are: Year 1=$5,000,000 - Year 2 = $8,000.000; Year 3=$8,000,000; and Year 4=$5,000,000 - Foxed costs will be \$300.000 each year. - Variable costs will be equal to 60 percent of sales. - The project will have an initial asset cost of $3.000.000 plus an additional $450.000 for shipping and handing. - The assets will be depreciated (don't forget shipping) using MACRS and a 3-year class life (therefore, it will be depreciated over 4 yearsi and the depreciation rates for Years 1 through 4 are: 33% : 45% : 15%, and 7%. - The company expects additional interest expense to be $50,000 in esch of Years 1 through 4. - The company will need to increase its inventories by $900,000 at Year 0 , and its accounts payable will also rise by $300,000 at Year 0 . This net operating working capital will be recovered at the end of the project's life, Year 4. - The company believes that it will be able to sell the assets for $250.000 at Year 4 . which will result in a gain on the sale of capital assets, since the book value of the assets will be zero. - The company's tax rate is 40 percent. - The appropriate risk-adjusted discount rate (WACC) for this project is 14 percent. Given this data, determine the project's net present value (NPV)

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