Problem $22-15$

Management of Braden Boats, Inc. is considering an expansion in

the firm's product line that requires the purchase of an additional

$$182,000$ in equipment with installation costs of $$20,000$ and

removal expenses of $$3,000($Note: the removal expenses are

considered terminal cash flows and not associated with the

installation of the new equipment$).$ The equipment and installation

costs will be depreciated over five years using straight$-$line

depreciation. The expansion is expected to increase earnings before

depreciation and taxes as follows:

The firm's income tax rate is $30$ percent and the weighted$-$average

cost of capital is $8$ percent. Based on the net present value method

of capital budgeting, should management undertake this project?

Use Appendix B to answer the question. Use a minus sign to enter a

negative value, if any. Round your answer to the nearest dollar.

NPV: $