He is considering a new investment whose data are shown below.
a) The investment project will utilize a piece of land with the market of value of $15,000.
b) He advised the firm to hire a marketing research firm and conduct feasibility research on the project, which has already cost the firm $10,000.
c) The project will require the purchase of machinery and equipment for the amount of $75,000.
d) The equipment would be depreciated on a straight-line basis over the project's 3-year life, would have a zero salvage value.
e) The project also would require additional net operating working capital for the amount of $15,000 that would be recovered at the end of the project's life.
f) The company has a WACC of 10% and a tax rate of 35%
g) The project would increase the company's annual sales by $75,000 each year for three years. (t=1 to t=3)
h) Annual cost for the project will be $25,000 per year.
i) The firm pays $12,000 interest expenses every year for their bank loans.
What is the project's NPV?