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With the growing popularity of casual surf print clothing, two recent MBA graduates decides to broaden this casual surf concept to encompass a surf lifestyle

With the growing popularity of casual surf print clothing, two recent MBA graduates decides to broaden this casual surf concept to encompass a surf lifestyle for the home. With limited capacity, they decided to focus on surf print table and floor lamps to accent peoples homes. They projected unit sales of these lamps to be 10,200 in the first year, with growth of 7 percent each year for the next five years. Production of these lamps will require $65,000 in net working capital to start. The net working capital will stay the same and be recovered at the end of the project. Total fixed costs are $285,000 per year, variable production costs are $18 per unit and the units are priced at $67 each. The equipment needed to begin production will cost $545,000. The equipment will be depreciated using the straight-line method over a 5-year life and is not expected to have a salvage value. The effective tax rate is 22% and the required rate of return is 15%. What the NPV of this project

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