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Atlantic Manufacturing is considering a new investment project that will last for four years. The delivered and installed cost of the machine needed for the

Atlantic Manufacturing is considering a new investment project that will last for four years. The delivered and installed cost of the machine needed for the project is $22,814 and it will be depreciated according to the three-year MACRS schedule. The project also requires an initial increase in net working capital of $291. Financial projections for sales and costs are in the table below. In addition, since sales are expected to fluctuate, NWC requirements will also fluctuate. The end-of-year NWC requirements are included below (hint: these NWC capital requirements DO NOT represent the change in NWC for the period). The $0 requirement for NWC at the end of year 4 means that all NWC is recovered by the end of the project. The corporate tax rate is 35% and the required return on the project is 12%.

Year

1

2

3

4

Sales

$11,758

$12,922

$13,819

$10,473

Costs

2,239

2,694

3,235

1,213

NWC Requirements

338

353

249

0

What is the projects NPV?

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