TexMex Food Company is considering anew salsa whose data are shown below. the equipment to be used would be depreciated by the straight-line method over its 3 year life and would have a zero salvage value, and no change in net operating working capital would be required. revenues and other operating costs are expected to be constant over the projects 3 year life. However, this project would compete with other TexMex products and would reduce their pre-tax, annual cash flows. What is the project's NPV?
WACC 10.0%
Pre tax cash flow reduction for other products -$5,000
Investment Cost depreciable basis $80,000
Annual sales revenues $67,500
Straight line depreciation 33.333%
Annual operating cost -$25,000
Tax rate 35.0%