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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: |
| 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 |
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| Required: |
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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.) |
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