The Umbrella Corporation is looking at a project that will require $200,000 in Fixed Assets and require another $40,000 in net working capital. The project is expected to produce sales of $220,000 with associated costs of $140,000. The project has a 4-year life. The company uses straight line depreciation to a zero book value over the life of the project. The tax rate is 30%.

a) What is the initial cost for this project?

b) At the end of this project, the company could free up $40,000 in net working capital and sell the fixed asset at $20,000. The tax rate of capital gain is 30%. What is the total cash flow (including operating cash flow) at Year 4?

c) What is the NPV for this project at a 10% discount rate?