Price/unit = 116

VC/ unit = 39

Expected quantity to sell(Q) = 16000

Fixed costs = 170000

Initial investment = 3400000

(Initial investment will be depreciated straight line over 9 years)

Opportunity cost of capital = 8%

Tax rate = 29 %

Operating Cash flow = 863575.56

- How do you find the NET PRESENT VALUE of this investment?

- What is the net present value of the project if inventories must be increased at the start of the project (year 0) by $700,000 and will be recovered at the end (year 9), given that the NPV of the project ignoring changes in net working capital is $1,994,659.73?