BASED ON ALL THIS INFORMATION WHAT IS THE Net present value ????

SEE QUESTIONS BELOW

Garrison Appliances, Inc., is considering expanding its international presence. It sells 25% of all the toaster ovens sold in the United States, but only 3% of the toaster ovens sold outside of the United States. The company believes that it can sell more of its product if it has a production facility located overseas. Estimates concerning two possible locations, Mumbai and Bangalore, follow:

Bangalore:

Years 1-20

	Net Income	Cash Flow
Annual cash savings	$860,000	+$860,000
Depreciation($2,800,000/20)	140,000
Income before tax	$720,000
Tax, 40%	288,000	-288,000
Net Income	$432,000
Annual Net cash flow		$572,000

Average rate of return on investment: Average Investment is (280,000) / 2 = $1,400,000 (432,000) / $140 ,000 =0.31

Payback period: 280,000 / 572000 = 4.9 years

QUESTION Net present value:

Year	Explanation	Amount Factor =	Present Value
0	Initial Investment	-$2,800,000 1	-$2,800,000
1-20	Annual net cash inflow	(Annual Net cash flow) 9.1285	5,221,502
	Net present value		$x,xxx,xxx