Cromwell Industries is considering a new project which will have costs, revenues, etc. as shown by the data above. If the cost of capital is 8%,what is the net present value (NPV) of this project?

 

Revenues Cost of Goods Sold Gross Profit Selling, General and Admin Depreciation EBIT Income tax (20%) Incremental Earnings Capital Purchases Changes to NWC Year 0 -600,000 Year 1 Year 2 800,000 800,000 -300,000 -300,000 500,000 500,000 -110,000 -110,000 -180,000 -180,000 210,000 210,000 -42,000 -42,000 168,000 168,000 -12,000 -12,000 Year 3 800,000 -300,000 500,000 -110,000 -180,000 210,000 -42,000 168,000 -12,000