Shanks Corporation Is considering a capltal budgeting project that Involves Investing $$606,000$ in equipment that would have a useful

Ilfe of $3$ years and zero salvage value. The company would also need to Invest $$21,500$ Immedlately in working capital which would be

released for use elsewhere at the end of the project in $3$ years. The net annual operating cash Inflow, which is the difference between

the Incremental sales revenue and Incremental cash operating expenses, would be $$309,000$ per year. The project would require a

one$-$time renovation expense of $$62,250$ at the end of year $2.$ The company uses stralght$-$IIne depreclation and the depreclation

expense on the equipment would be $$202,000$ per year. Assume cash flows occur at the end of the year except for the Inltial

Investments. The company takes Income taxes Into account In Its capltal budgeting. The Income tax rate is $30\%.$ The after$-$tax discount

rate is $15\%.$

Click here to view Exhiblt $7$B$-1$ to determine the approprlate discount factor$($s$)$ using table.

Required:

Determine the net present value of the project.

Note: Negatlve amount must be entered with a minus sign. Round Intermedlate calculatlons and final answer to the nearest clollar

amount.

Net present value