Please answer question # 7 below. Please show all work and solutions by hand (not in excel format). Thank you!

7) (15 pts) Jumpstart, Inc. recently hired you as a consultant to help with its capital budgeting process. The company is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?

Risk-adjusted WACC = 12.0% Net investment cost (depreciable basis) = $85,000

Straight-line deprec. rate = 33.33% Sales revenues, each year = $95,500 Operating costs (excl. deprec.), each year = $35,000

Tax rate = 40.0%

WACC 12.0% Years 0 1 2 3