I have the answer. What I don't understand is how you calculate the PV?? When I put the info in excel/financial calculator I get the wrong answer. Please help, I don't know what I'm doing wrong. Your corporation is considering investing in a new product line. The annual revenues for the new product line are expected to be $388,000.00 with variable costs equal to 50% of these sales. In addition, annual fixed costs associated with this new product line are expected to be $66,300.00. The old equipment currently has no market value. The new equipment cost $67,300.00. The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of $31,300.00. An increase in net working capital of $58,000.00 is also required for the life of the project. The corporation has a beta of 1.9, a tax rate of 33%, and a target capital structure consisting of 55% equity and 45% debt. Treasury securities have a yield of 1.2%, and the expected return on the market is 9.4%. In addition, the company currently has outstanding bonds that have a yield to maturity of 7.1%. $157,587.96 Solve for the PV of OCFs and FV using a financial calculator: FV = 78,971; PMT = 92,962; N = 3; I/Y = 11.37; CPT PV = -282,887.96. Subtracting initial CF from this results in NPV: 282,887.96 - 125,300= 157,587.96.