Problem:
A project will produce an operating cash flow of $14,600 a year for 7 years. The initial fixed asset investment in the project will be $48,900. The net aftertax salvage value is estimated at $12,000 and will be received during the last year of the project's life.
Required:
Question: What is the net present value of the project if the required rate of return is 12 percent?
Note: Provide specific examples to support your answers.