Use the following information for the next 2 questions, Q15-Q16.

Your company is thinking about taking on a new project. In analyzing the project, the financial staff has brought together the following information:

1. The new project will require an initial capital outlay of $60,000 at Year 0. This outlay will be used to purchase new equipment.

2. This equipment will be depreciated using a MACRS 5-year class life (i.e., depreciated over 6 years). So, the depreciation expense for Year 1 through Year 4, respectively, is $12,000 (20%), $19,200 (32%), $11,400 (19%), and $7,200 (12%).

3. The equipment will have a salvage value of $8,000 at the end of four years.

4. Inventories will rise by $4,000 at Year 0, and accounts payable will rise by $2,500 at Year 0. This increase in net operating working capital will be recovered at the end of the projects life, Year 4.

5. The new project is expected to have an economic life of four years. The business is expected to generate sales of $50,000 at Year 1, $40,000 at Year 2, $30,000 at Year 3, and $30,000 at Year 4.

6. Each year, operating costs (excluding depreciation) are expected to be 60 percent of sales.

7. The company expects to incur interest expense of $3,000 in each of the next 4 years.

8. Because of synergies with other divisions within the company, this project will add $7,500 of after-tax synergistic value each year.

9. The companys tax rate is 40 percent.

10. The company is very profitable, so any accounting losses on this project can be used to reduce the companys overall tax burden.

11. The projects weighted average cost of capital (WACC) is 14.24 percent, which is also the firms true reinvestment rate.

Determine the net present value for this project. Answer to the nearest whole dollar, without punctuation. For example, $1,234.56 is entered as "1235".

How high can the initial equipment cost be? That is, what initial capital outlay will cause the NPV to be zero? Assume the salvage value remains $8,000.