Foley Systems is considering a new investment whose data are shown below. The equipment would be depreciated using the MCRS system basis over the project’s 4-year life, would have a zero salvage value, and would require some additional working capital that would be recovered at the end of the project’s life. Revenues and other operating costs are expected to be constant over the project’s life. What is the project’s NPV?

The accelerated rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4.

WACC                                                                                    10.0%

Net initial investment in fixed assets                                   $75,000

Required new working capital                                             $15,000

Sales revenues, each year                                                    $75,000

Operating costs (excluding depreciation), each year           $25,000

Tax rate                                                                                   35.0%