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Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon After careful study Lander estimated the following costs and revenues for the project

Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Lander estimated the following costs and revenues for the project:

  

 
  Cost of equipment needed       $ 340,000  
  Working capital needed       $ 71,000  
  Overhaul of the equipment in two years       $ 23,500  
   Annual revenues and costs:            
   Sales revenues       $ 460,000  
   Variable expenses       $ 235,000  
   Fixed out-of-pocket operating costs       $

102,000

 
 
Required:

Calculate the net present value of this investment opportunity. (Negative amounts should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)

Aug 11 2020 View more View Less

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