NPV MOCK EXAM QUESTION 31

Compliment of the season and thank you for the resource on this platform.

please I need clarification on the question bellow:

Able LTD is considering a new project for which the following information is available:

Initial cost – $300,000

Expected life – 5 years

Estimated scrap value – $20,000

Additional revenue from the project – $120,000 per year

Incremental costs of the project – $ 30,000 per year

Cost of capital – 10%

a) Calculate the Net Present Value of project (to the nearest $).