Problem:
Lakeside Grapes is considering expanding its wine-making operations. They would need new equipment that costs $387 thousand that would be depreciated on a straight-line basis to a zero balance over the 5-year life of the project. The estimated pre-tax salvage value is $57 thousand. The project requires $35 thousand initially for net working capital, all of which will be recouped at the end of the project. The projected operating cash flow is $163 thousand a year.
Required:
Question: What is the net present value of this project if the relevant discount rate is 16.7 percent and the tax rate is 37 percent?
Note: Please show guided help with steps and answer.