Ski-Doo is considering new machinery that would reduce manufacturing costs associated with its Mach Z snowmobile, for which the free cash flows are shown in Table 10-3. If the firm has a 12 percent required rate of return, what is the NPV of the project? Should the company accept the project?

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TABLE 10-3 Ski-Doo's Investment in New Machinery and Its Associated Free Cash Flows Free Cash Flow -$40,000 15,000 14,000 13,000 12,000 11,000 Initial outlay Inflow year 1 Inflow year 2 Inflow year 3 Inflow year 4 Inflow year 5