Problem 22-15 Management of Braden Boats, Inc. is considering an expansion in the firms product line that requires the purchase of an additional $197,000 in equipment with installation costs of $15,000 and removal expenses of $3,500 (Note: the removal expenses are considered terminal cash flows).

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: Years 1 and 2 $ 85,000

Years 3 and 4 $ 55,000

Year 5 $ 62,000

The firms income tax rate is 30 percent and the weighted-average cost of capital is 18 percent. Based on the net present value method of capital budgeting, should management undertake this project? Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.

NPV: ?