The Freeman Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 38 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.

Investment Year 0: $35,000

Sales Revenue: Year One: $18,000, Year 2: $18,500 Year 3: $19,000 Year 4: $16,000

Operating Costs: Year One: $3,800, Year 2: $3,900 Year 3: $4000 Year 4: $3200

Depreciation: Year One: $8,750, Year 2: $8,750 Year 3: $8,750 Year 4: $8,750

Net Working Capital Spending:

Year 0: 410 Year One: $460 Year 2: $510 Year 3: $410 Year 4: ?

a.Compute the incremental net income of the investment for each year.(Do not round intermediate calculations.)

Incremental Net Income:

Year 1:

Year 2:

Year 3:

Year 4:

b.Compute the incremental cash flows of the investment for each year.(Do not round intermediate calculations.A negative answer should be indicated by a minus sign.)

Incremental Cash flow:

Year 0:

Year 1:

Year 2:

Year 3:

Year 4:

Cash flow

c.Suppose the appropriate discount rate is 11 percent. What is the NPV of the project?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

NPV=