Firm Y has the opportunity to invest in a new venture. The projected cash flows are as follows:

Year 0: Initial cash investment in the project of $300,000.

Years 1, 2, and 3: Generate cash revenues of $50,000.

Years 1, 2, and 3: Incur fully deductible cash expenditures of $30,000.

Year 3: Incur nondeductible cash expenditure of $10,000.

Year 3: Receive $300,000 cash as a return of the initial investment.

Required:

Assuming a 6 percent discount rate and a 30 percent marginal tax rate, compute the NPV of the cash flows resulting from investment in this opportunity. Use Appendix A and Appendix B.

Note: Round discount factor(s) to 3 decimal places. Cash outflows and negative amounts should be indicated by a minus sign.

	Year 0	Year 1	Year 2	Year3
Before tax cash flow
Tax cash flow
After tax cash flow
PV
NPV