Computation of net present value and decision making. Maple Media is considering a proposal to enter a new line of business. In reviewing the proposal, the company’s CFO is considering the following facts: 1.The new business will require the company to purchase additional fixed assets that will cost $600,000 at t = 0. For tax and accounting purposes, these costs will be depreciated on a straight-line basis over three years. 2.At the end of three years, the company will get out of the business and will sell the fixed assets at a salvage value of $100,000. 3.The project will require a $50,000 increase in net working capital at t = 0, which will be recovered at the end of the life of the new business. 4.The company’s tax rate is 35 percent. 5.The new business is expected to generate $2 million in sales each year. The operating costs, excluding depreciation, are expected to be $1.4 million per year. 6.The project’s appropriate discount rate is 12 percent.