Golden Gelt Giftware

The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $45. The unit cost of the giftware is $30.

Year Unit Sales
1 42,000
2 48,000
3 19,000
4 9,000
Thereafter 0


It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (year-0) investment in working capital of .20 × 42,000 × $45 = $378,000. Plant and equipment necessary to establish the Giftware business will require an additional investment of $220,000. This investment will be depreciated using MACRS and a 3-year life. After 4 years, the equipment will have an economic and book value of zero. The firm’s tax rate is 20%. What is the net present value of the project? The discount rate is 12%. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)