Given the following information about a possible average-risk, new product investment, calculate the investment's net present value.

Initial Cost $200,000

Expected Life 10yrs

Salvage Value 0

Annual Depreciation $20,000

Incremental Annual Sales $200,000

Incremental Annual Production Costs $110,000

Incremental Annual Selling & Admin Costs. $20,000

Tax Rate 50%

Expected Inventory Turnover (calculated as production costs / ending inventory) 4 times Expected Collection Period 45 days

Cost of Capital8%

Borrowing rate7%

Target Debt to Equity Ratio130%

Hint: Assume the company is on a 360 day year. Networking capital investment is only necessary at the onset of the project (year 1), it is recalled in period 10.

PLEASE INCLUDE THE CALCUATIONS In excel