Cost of new equipment: $80,000
Installation cost of equipment: $40,000
Life of equipment: 5 years
Straight line depreciation
Expected sales: $170,000 per year
Expected reduction in sales of cheap T-shirts
Raw material cost: $90,000 per year
New worker salary: $20,000 per year
Tax rate: 35%
Assuming a WACC of 13%, what is this project's NPV?
a. -5,068
b. 1,610
c. 8,870
d. 16,742
e. 25,294