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 recieved in cash, all operating costs and income tax 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.

Year 0 Year 1 Year 2 Year 3 Year 4

Investment 36,000

Sales revenue $18,500 $19,000 $19,500 $16,500

Operating Costs 3,900 4,000 4,100 3,300

Depreciation 9,000 9,000 9,000 9,000

Net working capital funds 420 470 520 420 ?

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

Net Income Year 1 _____ Year 2 ______ Year 3 _____ Year 4 _______

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

Cash Flow Year 0 ________ Year 1 ____ Year 2 _____ Year 3 ______ Year 4 _______

Suppose the appropriate discount rate is 12 percent, What is the NPV of the project?

NPV ______