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(Ignore income taxes in this problem.) New Tattoo Parlor is considering a capital budgeting project. This...

(Ignore income taxes in this problem.) New Tattoo Parlor is considering a capital budgeting project. This project will initially require a $25,000 investment in equipment and a $3,000 working capital investment. The useful life of this project is 6 years with an expected salvage value of zero on the equipment. The working capital will be released at the end of the 6 years. In addition, the new system will require a $2,000 retro fit at the end of year 4. The new system is expected to generate net cash inflows of $9,000 per year in each of the 6 years. Nevus' discount rate is 14%. The net present value of this project is closest to:

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Answer #1
A Annual Cash Flow $         9,000.00
B PVA Factor 14%, 6year 3.88867
C Present Value Of Cash Flow (A*B) $       34,998.01
D Release Of Working Capital $         3,000.00
E PV Factor (14%, 6 Year) 0.4556
F PV of Working Capital (D*E) $         1,366.76
G Retro Fit cost $         2,000.00
H PV factor 4th year 0.5921
I PV of retrofit cost $         1,184.16
J Initial Investment + working capital $       28,000.00
L Net Present Value (C+f-I-J) $         7,180.61
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