FincoInc. manufactures financial calculators.The company is deciding whether to introduce a new calculator.This calculator will sell for $100.The company feels that sales will be 12,500, 13,000, 14,000, 13,200, and 12,500 units per year for the next 5 years.Variable costs will be 25% of sales, and fixed costs are $300,000 per year.The firm hired a marketing team to analyze the viability of the product and the marketing analysis cost $1,500,000.The company plans to use a vacant warehouse to manufacture and store the calculators.Based on a recent appraisal the warehouse and the property is worth $2.5 million on an after-tax basis. If the company does not sell the property today then it will sell the property 5 years from today at the currently appraised value.This project will require an injection of net working capital at the onset of the project in the amount of $100,000.This networking capital will be fully recovered at the end of the project.The firm will need to purchase some equipment in the amount of $1,200,000 to produce the new calculators.The machine has a 7-year life and will be depreciated using the straight-line method.At the end of the project, the anticipated market value of the machine is $150,000.The firm requires a10% return on its investment and has a tax rate of 21%.

Calculate the cash flow from assets at the end of year 5.

Calculate the net present value for the project.