XYZ is considering a project that would last for 3 years and have a cost of capital of 19.40 percent. The relevant level of net working capital for the project is expected to be $2,161.90 immediately (at year 0); $4,850.00 in 1 year; $14,100.00 in 2 years; and $0.00 in 3 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, 2, and 3 are presented in the following table. The tax rate is 53.90 percent. 

 

What is the net present value of this project?

Year O Revenue Costs Depreciation Cash flows from capital spending Year 1 $ 0.00 $ 0.00 $ 0.00 $-5,800.00 Year 2 $12,500.00 $3,570.00 $1,810.00 $1,720.00 Year 3 $13,100.00 $3,640.00 $1,770.00 $1,620.00