The initial cash outlay and pre-tax cash flow projections are presented below for new equipment that Outdoor Sports, Inc. is evaluating.

Outdoor Sports is considering manufacturing a new line of laser rangefinders:

Initial Cash Outlay

$1,000,000

Annual pre-tax cash inflows at the end of each of Years 1 to 5

$350,000

Salvage value

$100,000

Outdoor Sports uses an after-tax cost of capital of 8 percent per year for discounting purposes.

It depreciates its equipment on a straight-line basis over a period of five years and its tax rate is 25%.

What is the NPV of the project?