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Consider the following project for Dawg Incorporated: YEAR 0 1 2 3 4 5 Sales $150,000 $150,000 $150,000 $150,000 $150,000 Cost of Goods $65,000 $65,000

Consider the following project for Dawg Incorporated:

YEAR

0

1

2

3

4

5

Sales

$150,000

$150,000

$150,000

$150,000

$150,000

Cost of Goods

$65,000

$65,000

$65,000

$65,000

$65,000

S&A

$30,000

$30,000

$30,000

$30,000

$30,000

Depreciation

$30,000

$30,000

$30,000

$30,000

$30,000

Investment in NWC

$1,000

$500

$500

$500

$500

$500

Investment in Gross PPE

$150,000

The project will last 5 years and has the same risk as the typical Dawg Incorporated project. The firm has a capital structure of 30.00% debt and 70.00% equity. The cost of debt is 8.00%, while the cost of equity is estimated at 15.00%. The tax rate facing the firm is 30.00%. There is no reclaimed NWC or NSV at end of year 5.

What is the NPV for this project?

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