QLite Sports is considering adding a miniature golf course to its facility. The course would cost $134,536, would be depreciated on a straight line basis over its 5-year life, and would have a zero salvage value. The estimated income from the golfing fees would be $70,981 a year with $28,712 of that amount being variable cost. The fixed cost would be $14,238. In addition, the firm anticipates an additional $14,553 in revenue from its existing facilities if the golf course is added. The project will require $3,262 of net working capital, which is recoverable at the end of the project.
What is the net present value of this project at a discount rate of 8.4 percent and a tax rate of 37 percent?