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Lic Pools sells outdoor swimming pools and currently has an after -t ax cost of ...

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Lic Pools sells outdoor swimming pools and currently has an after-tax cost of capital of 11.6 %. Al's Construction builds and sells water features and fountains and has an after-tax cost of capital of 10.8 %. Lic Pools is considering building and selling its own water features and fountains. The sales manager of Lic Pools estimates that the water features and fountains would produce 20 % of the firm's future total sales. The initial cash outlay for this project would be $85,000. The expected net cash inflows are $16,000 a year for 7 years. What is the net present value of the Lic Pools project?

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