Naomi Brown is reviewing a capital budgeting proposal from AVA, Inc. AVA is considering investing in new equipment. The details of the proposal are as follows:
- The net investment outlay is $580,000.
- The investment will generate $275,500 in after-tax incremental cash flow at the end of each of the next 5 years.
- At the end of the fifth year, there will be an after-tax terminal cash flow of $138,500.
- The weighted average cost of capital for this project is 12%.
The net present value of the investment is closest to:
