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After several years of operating the homeless shelter, you bring a new proposal to the governing board. By cleaning up an unused room and upgrading

After several years of operating the homeless shelter, you bring a new proposal to the governing board. By cleaning up an unused room and upgrading the church kitchen, the shelter will be able to expand its capacity. As a result, it will generate cash inflows and cash outflows over the remaining 5 years of the City contract in the amounts in the table below. If the discount rate is 5%, should the church proceed with this investment? Use NPV to show your analysis.

Year Cash Inflows Cash Outflows
0 0 (90,000)
1 37,000 (18,000)
2 39,000 (18,000)
3 42,000 (18,500)
4 44,000 (18,500)
5 45,000 (19,000)

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