Explain what is the net present value of this project

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Lakeside Winery is considering expanding its wine-making operations. The expansion will require new equipment costing $509485 that would be depreciated on a straight-line basis to a zero balance over the 4-year life of the project. The estimated after-tax net cash flow from salvage is $121203. The project requires $38514 initially for net working capital, all of which will be recouped at the end of the project. The projected operating cash flow is $198201 each year of the project (except year 0). What is the net present value of this project if the relevant discount rate is 14 percent and the tax rate is 35 percent? Round your answer to the nearest dollar.

Reference no: EM13264730

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