When Gary first pitched a new product idea to his manager, it was very well received because he did such a thorough job of

esearching and analyzing it$.$ He presented a comprehensive forecast that included both possible and probable levels of returns to be

earned from this investment. As a result, the company handed over the money and put Gary in charge of the project. The company

olanned to evaluate the investment based on his "probable" forecast.

One year into the project, money started getting tight in other divisions of the company. Pressure was on for Gary to provide some

oroof that this $3-$year investment was starting to work. As of the end of that first year, $$11,800$ in operating costs and $$11,800$ in new

operating cash inflows $($both reflect after$-$tax amounts$)$ had been realized.

Gary had collected the following information but clearly still only had projections for the remaining $2$ years of this project.

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a$)$

Your answer is incorrect.

What was Gary's initial projection for the NPV of the cash flows at this probable level of activity, assuming an $8\%$ discount rate?

Tax effects, including any depreciation tax shield, have already been accounted for in the above amounts. $($Round present value

factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answer to $2$ decimal places e$.$g$.5,125\mathrm{.}36.$ Enter negative amounts using

either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).)$