So a company will sell yeti at a price of $86 per unit. The variable cost to produce yeti is $50 per unit. The company expects to sell 16,000 yetis to consumers each year. The fixed costs incurred each year will be $120,000. There is an initial investment to produce the goods of $2,900,000 which will be depreciated straight line over the 7 year life of the investment to a salvage value of $0. The opportunity cost of capital is 5% and the tax rate is 27%.

1. What is the operating cash flow?

2. Using the operating cash flow, what is the net present value of the investment? And should the project be rejected or accepted.