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Gateway Communications is considering a project with an initial fixed asset cost of $ 2 . 8 7 2 million which will be depreciated straight

Gateway Communications is considering a project with an initial fixed asset cost of $2.872 million which will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project the equipment will be sold for an estimated $300,000. The project will not directly produce any sales but will reduce operating costs by $714,000 a year. The tax rate is 35%. The project will require $52,000 of inventory which will be recouped when the project ends. What is the NPV at a required return of 13.6%?
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