18. The management of Polymer Corporation, a plastics manufacturer, is considering accepting a five year contract to provide parts for a large manufacturer. Below is the cost and revenue information associated with the contract.

Cost of Special Equipment $200,000

Working Capital Required $100,000

Equipment Repairs in 3 Years $30,000

Salvage Value of Equipment in 5 Years $10,000

Annual Cash Revenue and Costs:

Sales Revenue from Parts 10,000 parts at $70 each

Cost of Parts Sold $500,000

Salaries, Shipping and Other Costs $100,000

At the end of five years the working capital will be released and can be used elsewhere by Polymer.

Polymer uses a discount rate of 8%.

What is the Net Present Value of the contract and determine should the contract be accepted?