QUESTION $4$

Phone Home, Inc. is considering a new $4-$year expansion project that requires an initial fixed

asset investment of $$3$ million. The fixed asset will be depreciated straight$-$line to zero over its $4-$

year tax life, after which time it will have a market value of $$231,000.$ The project requires an

initial investment in net working capital of $$330,000,$ all of which will be recovered at the end of

the project. The project is estimated to generate $$2,640,000$ in annual sales, with costs of

$$1,056,000.$ The tax rate is $31$ percent and the required return for the project is $15$ percent. What

is the net present value for this project?