Given the following information about a possible average-risk, new product investment, calculate the investments net present value. Show your calculations.

Initial cost	$	200,000
Expected life (years)		10
Salvage value	$	0
Annual depreciation	$	20,000
Incremental annual sales	$	200,000
Incremental annual production costs	$	110,000
Incremental annual selling and administrative costs	$	20,000
Tax rate		50	%
Expected inventory turnover (Prod. cost/End. inv.)		4
Expected collection period (days)		45
Cost of capital		8	%
Borrowing rate		7	%
Target debt-to-equity ratio		130	%