Question $2(1$ point$)$

You are considering adding a new item to your company's line of products. The machine required to manufacture the item costs $$200000,$ and it depreciates straight$-$line over $4$ years. The new item would require a $$300000$ increase in inventory and a $$150000$ increase in accounts payable. You plan to market the items for four years and then sell the machine for $$400000.$ You expect to sell $20000$ items per year at a price of $$300.$ You expect manufacturing costs to be $$220$ per item and the fixed cost to be $$300000$ per year. If the tax rate is $38\%$ and your weighted average cost of capital is $8\%$ per year, what is the net present value of selling the new item?

$-$$$1,044,507$

$$1,441,420$

$$1,253,409$

$-$$$1,441,420$

$$1,044,507$