I need help understanding the equation used to answer this question

Q) A project has the following information. You may assume all revenue, variable costs and fixed costs are cash. Assume a tax rate of 30%. Start up costs for a new project include $100,000 to buy new production equipment and $20,000 to fully install and integrate this equipment. The equipment is being depreciated to zero using straight line depreciation over a five-year tax life. At the end of year five the equipment can be sold for $12,000. The project will generate operating cash flows (OCF) of $45,000 per annum. Calculate the NPV of the project if the required return is 16% per annum and the project life is five years.

State your answer using the format $x,xxx.xx, use full accuracy in all intermediate calculations.

the answer is as follows;

After-tax salvage = $12,000 - 0.3*(12,000 - 0) = $8,400

Opearting Cash Flows = $45,000 per year for five years

NPV = 45,000*(1 - (1/(1.16)^5))/0.16 + 8,400/(1.16)^5 - $120,000 = $31,342.56374

NPV of project = $31,342.56 to the nearest cent.

we are told to use this formula to find FCF: FCF = OCF - NWC - CAPEX + After tax Salvage

I can see where they get the OCF, after tax salvage and the CAPEX from, but I don't see where they've used the changes in NWC?

they've used the annuity equation in the beginning for 45,000*(1 - (1/(1.16)^5)). but I don't understand why they've divided by the rate of return (16%) before using the present value of a single cash flow formula using the after tax salvage as the FV?