Axillar Beauty Products Corporation is considering the production of a new conditioning shampoo that will require the  purchase of new mixing machinery. The machinery will cost $375,000, is expected
to have a useful life of 10 years, and is expected to have a salvage value of
$50,000 at the end of 10 years. The machinery will also need a $35,000 overhaul
at the end of year 6. A $40,000 increase in working capital will be needed for
this investment project. The working capital will be released at the end of the
10 years. The new shampoo is expected to generate net cash inflows of $85,000
per year for each of the 10 years. Axillar's discount rate is 16%.

(a) What is the net present value of this investment opportunity?
(b) Based on your answer to (a) above, should Axillar go ahead with the new conditioning
shampoo?
note:- Ignore income taxes in this problem



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