The New Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. Initial investment is $24,000. The corporate tax rate is 34 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. Net working capital shows the annual expenditures on net working capital, not levels. Thus, NWC expenditures are 300, 350, 400 and $300 in the first four years. Hence the total spent on NWC over the life of the project is 1,350. All net working capital is recovered at the end of the project.

a. Compute the incremental net income of the investment for each year.

b. Compute the incremental cash flows of the investment for each year.

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