Yarra Snack has decided to produce a new type of snack, coconut rolls, after conducting a $10,000 feasibility study. This product is expected to last for 3 years and the expected sales for this product is $50,000 per year. The cost of producing this product is $23,000 per year. A new equipment of $9,000 is required at the start of the investment. The useful life of the equipment is 3 years (straight line) and it has a zero salvage value. Other costs including marketing and advertising amount to 2,500 per year. Because of this new product, the sales of the existing Yarra Snack products will be reduced. It is estimated that the reduction in sales of the existing products will be $8,000 per year. The company tax rate is 30% and the appropriate discount rate for all cash flows is 10%. Calculate the NPV for this investment.

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