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#12 An analyst has created estimates for a new Putt Putt course near the local elementary school. The course will require an investment (building and

#12

An analyst has created estimates for a new Putt Putt course near the local elementary school. The course will require an investment (building and equipment) at year 0 of $183,879.00. This amount can be depreciated over 5 years using the straight-line approach. The building can be sold for an NSV of $49,009.00 in year 5. The entrepreneur needs help estimating the cash flows for the business.

0

1

2

3

4

5

Sales

$67,588.00

$67,588.00

$67,588.00

$67,588.00

$67,588.00

Expenses

$30,000.00

$30,000.00

$30,000.00

$30,000.00

$30,000.00

Depreciation

$36,775.80

$36,775.80

$36,775.80

$36,775.80

$36,775.80

Investment in NWC

$1,299.00

$0

$0

$0

$0

The investor wants an 10.00% return on the investment and the firm faces a 34.00% tax rate.

What is the NPV of this project?

Answer format: Currency: Round to: 2 decimal places.

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