Problem 6 Golden Gate Windsurfing Inc. is considering a project to expand its current operation. Given the following information and assuming straight-line depreciation to zero: What is the net present value of this project? Should Golden Gate Windsurfing Inc. accept the project and why? Market research study = $15,000 Project life = 5 years Initial investment on fixed assets = $320,000; the fixed assets will be sold for $30,000 at the end of year 5. Initial working capital = $25,000 (the money will be recovered on closure of the project) Operating income = (sales - costs) = $150,000 per year; Losses in current sales if proceed the project: $20,000 in year 1 and $16,000 in year 2. Corporate tax rate = 25% Discount rate 13.45%