Kodak Films is considering some new equipment whose data are shown below to

replace their existing equipment which has a book value of $$0.$ The required

equipment has a $3-$year tax life, and the accelerated rates for such property

are $33\mathrm{.}33\%,44\mathrm{.}45\%,14\mathrm{.}81\%,$ and $7\mathrm{.}41\%$ for Years $1$ through $4$ and it would

have a positive pre$-$tax salvage value at the end of Year $3,$ when the project

would be closed down. Also, some new working capital would be required, but

it would be recovered at the end of the project's life. Revenues and other

operating costs are expected to be constant over the project's $3-$year life.

What is the project's NPV$?$

WACC $9\mathrm{.}0\%$

Cost of new equipment $($depreciable basis$)$ $$70,000$

Salvage value of old equipment $$5,000$

Required new working capital $$10,000$

Sales revenues, each year $$75,000$

Operating costs $($excl$.$ depreciation$),$ each

year $$30,000$

Expected pretax salvage value new $$5,000$

Tax rate $25\mathrm{.}0\%$