Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be used, and it could sell it for $100,000 after taxes if it decides not to open the new office. The equipment for the project would be depreciated by the straight-line method over the project's 3-year life, after which it would be worth nothing and thus it would have a zero salvage value. No new working capital would be required, and revenues and other operating costs would be constant over the project's 3-year life. What is the project's NPV?

WACC ....................................................... 10.0%

Opportunity cost .................................... $100,000

Net equipment cost (depreciable basis) ... $65,000

Straight-line depr. Rate for equipment .... 33.333%

Sales revenues, each year ....................... $141,000

Operating costs (excl. depr.), each year ... $25,000

Tax rate ......................................................... 35%