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Cash Flows and NPV (L02) We project unit sales for a new household-use laserguided cockroach search and destroy system as follows: Year Unit Sales 1

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Cash Flows and NPV (L02) We project unit sales for a new household-use laserguided cockroach search and destroy system as follows: Year Unit Sales 1 93,000 2 105,000 3 128,000 4 1 34,000 5 87,000 The new system will be prieed to sell at $330 each. The cockroach eradicator project will require $1,800,000 in net working capital to start, and total net working capital will rise to 15 percent ofthe change in sales. The 1irarialzule cost per unit is $265, and total timed costs are $1,200,000 per year. The equipment necessary to begin production will cost a total of $24 million. This equipment is mostly industrial machinery and thus qualies for CCA at a rate of 20 percent. In five years, this equipment will actually be worth about 20 percent of its cost. The relevant tax rate is 35 percent, and the required return is 18 percent. Based on these preliminary estimates, what is the NPV of the project

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