LM Company is considering investing in a new project that will generate cash

inflows of $54,000 every year for the ten-year life of the project. Investing

in this new project will require the purchase of a new machine, which will cost

$250,000. The machine will have a salvage value of $10,000 at the end of ten

years, but will require a repair costing $12,000 at the end of year four and a

repair costing $20,000 at the end of year seven. In addition, this project will

require an immediate investment of $33,000 in working capital which would be

released for investment elsewhere at the end of the ten years. LM Company has

a cost of capital of 8% and an income tax rate of 30%.

Calculate the net present value (NPV) of the new project.