1. Burress Beverages is considering a project where they would open a new facility in Seattle, Washington. The companys CFO has assembled the following information regarding the proposed project:

• It would cost $500,000 today (at t = 0) to construct the new facility. The cost of the facility will be depreciated on a straight-line basis over five years.
• If the company opens the facility, it will need to increase its inventory by $100,000 at t = 0. $70,000 of this inventory will be financed with accounts payable.
• The CFO has estimated that the project will generate the following amount of revenue over the next three years:

Year 1 Revenue = $1.0 million

Year 2 Revenue = $1.2 million

Year 3 Revenue = $1.5 million

• Operating costs excluding depreciation equal 70 percent of revenue.
• The company plans to abandon the facility after three years. At t = 3, the projects estimated salvage value will be $200,000. At t = 3, the company will also recover the net operating working capital investment that it made at t = 0.
• The projects cost of capital is 14 percent.
• The companys tax rate is 40 percent.

What is the projects net present value (NPV)?

1. $ 69,207
2. $178,946
3. $286,361
4. $170,453
5. $224,451

I don't know how to get 224451