Calculating Project NPV With the growing popularity of clothing manufactured from plastic, two friends decided to broaden this casual concept to clothing for pets. With limited capital, they decided to focus on clothing for dogs. They projected unit sales to be 8, 500 in the first year, with growth of 6 percent each year for the next four years. Production of these clothes will require $25, 000 in net working capital to start. Net working capital will be fully recovered at the end of the project. Total fixed costs are $115, 000 per year, variable production costs are $35 per unit, and the units are priced at $60 each. The equipment needed to begin production will cost $270, 000. The equipment will be depreciated using the straight-line method over a three-year life and is expected to have a before tax salvage value of $20, 000 at the end of the fourth year. The effective tax rate is 35 percent, and the required rate of return is 12 percent. What is the NPV of this project?