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Harvest Fields is considering expanding its wine-making operations.

Harvest Fields is considering expanding its wine-making operations. The expansion will require new equipment costing $489,000 that would be depreciated on a straight-line basis to a zero balance over the 5-year life of the project. The estimated salvage value is $172,000. The project requires $41,000 initially for net working capital, all of which will be recouped at the end of the project. The projected operating cash flow is $201,500 a year. What is the net present value of this project if the relevant discount rate is 16 percent and the tax rate is 34 percent?

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