Foley Systems is considering a new project whose data are shown below. Under the new tax law, the equipment for the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. After the project's 3-year life, the equipment would have zero salvage value. The project would require additional net operating working capital (NOWC) that would be recovered at the end of the project's life. Revenues and operating costs are expected to be constant over the project's life. What is the project's NPV? (Hint: Cash flows from operations are constant in Years 1 to 3.) Do not round the intermediate calculations and round the final answer to the nearest whole number.

WACC	10.0%
Equipment cost	$77,500
Required net operating working capital (NOWC)	$20,000
Annual sales revenues	$81,000
Annual operating costs	$28,000
Tax rate	25.0%

Which one of the following would NOT result in incremental cash flows and thus should NOT be included in the capital budgeting analysis for a new product?

a. The cost of a study relating to the market for the new product that was completed last year. The results of this research were positive, and they led to the tentative decision to go ahead with the new product. The cost of the research was incurred and expensed for tax purposes last year.

b. It is learned that land the company owns and would use for the new project, if it is accepted, could be sold to another firm.

c. Revenues from an existing product would be lost as a result of customers switching to the new product.

d. Using some of the firm's high-quality factory floor space that is currently unused to produce the proposed new product. This space could be used for other products if it is not used for the project under consideration.

e. Shipping and installation costs associated with a machine that would be used to produce the new product.