QUESTION $10$

Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing $$679,000$ that would be depreciated on a straight$-$line basis to zero over the $4-$year life of the project. The equipment will have a market value of $$183,000$ at the end of the project. The project requires $$53,000$ initially for net working capital, which will be recovered at the end of the project. The operating cash flow will be $$202,900$ a year. What is the net present value of this project if the relevant discount rate is $13$ percent and the tax rate is $21$ percent?

$-$$$19,708$

$-$$$7,306$

$-$$$25,952$

$-$$$27,949$

$-$$$23,357$