Alvin Printing is considering new printing machine whose data are shown below. The equipment has a 4-year tax life and would be fully depreciated by the straight-line method over 4 years, but it would have a positive pre-tax salvage value at the end of Year 4, when the project would be closed down. Also, additional net operating working capital would be required, but it 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 4-year life. Calculate the project's NPV and IRR.

WACC

10.0%

Net investment in new printing machine

$120,000

Transportation and Insurance of new printing machine

$20,000

Training of staff on how to use the new printing machine

$5,000

Required net operating working capital

$10,000

Research and development of new product

$25,000

Annual sales revenues

$100,000

Annual operating costs (excl. depreciation)

$35,000

Expected pre-tax salvage value

$4,000

Tax rate

25.0%