Quast Company was considering the following investment opportunity:

Cost of new equipment $500,000

Annual depreciation $ 90,000

Working capital required $100,000

Annual (cash) revenue (for 5 years) $260,000

Annual (cash) expenses (for 5 years) $125,000

Cost to upgrade equipment in 3 years` $ 20,000

Salvage value of equipment in 5 years $ 50,000

The length of the project is 5 years, after which the working capital will be released for investment elsewhere in the company and the equipment will be sold for its salvage value.

Assuming the companys required rate of return is 6%, what is the NPV of this project?

Show computations, including PV factors used (PV tables are available on pager 614-615 of the text).