An accounting firm is considering expanding their operations into new office space so that they can hire more staff and expand their company. The new lease requires a 5-year commitment. If the firm expands its operations, profitsAssuming that the lease requires a security deposit of $500,000 that is fully refundable at the end of the 5 years. Recalculate the NPV of the project. Hint: Think of the security deposit like working capital (15 words minimum 3 points). are expected to increase by $250,000 during 2023 and then those additional profits should increase by 12% each year from 2024 to 2027. Leasehold improvements to move into the new office space will cost the firm $850,000 with an estimated useful life of 5 years.

Assuming that the lease requires a security deposit of $500,000 that is fully refundable at the end of the 5 years. Recalculate the NPV of the project. Hint: Think of the security deposit like working capital (15 words minimum 3 points).