Events Expert Corp. is planning to acquire new equipment for a cost of $$28,000.$ Management has already conducted and paid $$15,000$ for a marketing survey while delivery and installation costs are expected to be $$1,900$ and $$400,$ respectively. Financing costs are $$3,000$ per year. The economic life of the investment is $5$ years and the new equipment will depreciate straight$-$line to a zero value over $5$ years. The management team expects this new equipment at the end of $5$ years at a price of $$5,000.$

Events Expert Corp expects the acquisition to increase sales by $$7,700$ annually while cash operating costs are expected to increase by $$800$ annually. This investment will allow the replacement of old equipment which can be sold for $$4,000.$ It has a book value of $$5,000$ that should to be depreciated for two more years. This will no longer be depreciated after we replace the old equipment. The marginal tax rate is $20\%$ and the expected rate of return is $11\%.$

Additional net working capital of $$500$ will be needed immediately. When the project is terminated in $5$ years, there no longer will be a need for this incremental working capital.

$1.$ Compute the net investment

$2.$ Compute the net cash flow for each of the five years of the project

$3.$ What is the NPV of the project and should the project be accepted or not?