May I see the reasoning behind this problem please?

Your company is considering a 3-year contract to produce organic chocolates in Seattle. The equipment needed would cost $50,000 and would be depreciated on a 5-year basis to zero. You think you might be able to sell the equipment at the end of the contract for $24,000. You will also use some existing equipment with a book value of zero and a market value of $10,000. You would make the chocolate in some unused space in your facility. You have no other plans to use that space, but it represents 10% of the space in that facility. The annual cost of operating the facility is $100,000. The cost of producing the chocolate would be $200,000 per year. The revenues are expected to be $225,000 per year. You are also planning to do market research costing $10,000 before picking the flavors of chocolate to produce. New working capital for production will be $20,000 immediately. Project working capital will stay level at $20,000 in year 1 and 2 and then drop to 0 at the end of the project. Current working capital levels elsewhere in the company are $15,000. Your discount rate is 12% and your tax rate is 35%. Forecast all incremental free cash flows and compute the project's NPV. You can assume that the company has taxable income in other parts that can be shielded from taxes by costs