1. Party Place is considering a new investment whose data are shown below. The equipment that would be used would have a constant annual capital cost allowance over the projects 3-year life and a zero salvage value. This project would require some additional working capital that would be recovered at the end of the projects life. Revenues and cash operating costs are expected to be constant over the projects 3-year life. What is the projects NPV? ( Hint: Cash flows are constant in Years 1 to 3. CCA is modified to smooth out the calculations.)

   WACC	10.0%
   Net investment in fixed assets (basis)	$65,000
   Required new working capital	$10,000
   Annual capital cost allowance	$21,665
   Sales revenues, each year	$70,000
   Cash operating costs, each year	$25,000
   Tax rate	35.0%

   	a.	$27,913
   	b.	$25,318
   	c.	$26,584
   	d.	$24,112