A potential project with is expected to generate the following revenue per annum for the next 6 years with a after-tax operating cash flow margin of 20% (prior to consideration of working capital) from new business with a government agency.

Year 1 $600,000; Year 2 $650,000; Year 3 $675,000; Year 4 $700,000; Year 5 $700,000; Year 6 $650,000

The project will have an initial outlay of $450,000. The firm uses a cost of capital of 11%. What is the NPV of the project?

Now consider, the government agency is expected to be a slow pay with an A/R of 175 days. What is the revised NPV of the project?