Question
The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $44. The unit cost of the giftware is $20. Year Unit
The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $44. The unit cost of the giftware is $20. Year Unit Sales 1 21,600 2 30,500 3 10,800 4 5,800 Thereafter 0 It is expected that net working capital will amount to 23% of sales in the following year. For example, the store will need an initial (year 0) investment in working capital of 0.23 21,600 $44 = $218,592. Plant and equipment necessary to establish the giftware business will require an additional investment of $189,000. This investment will be depreciated in an asset class with a CCA rate of 25%. We will assume that the firm has other assets in this asset class. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 35%. The discount rate is 20%. What is the net present value of the project? (Round your answer to the nearest whole dollar amount.) NPV $
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