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Carole's Cat Company is considering investing $925,000 in a project to build out a new section of their park. Details about this project are as
Carole's Cat Company is considering investing $925,000 in a project to build out a new section of their park. Details about this project are as follows: The project would last 7 years Would require they tie up working capital in the amount of $42,000, which would be released for use elsewhere at the end of the project They estimate by expanding their park, they would bring in additional annual net cash inflows of $194,000. At the end of this project, the equipment (assets) used to build this would be sold for $52,000 (salvage value). The company uses a discount rate of 12%. (Ignore income taxes in this problem.) Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables. Required: Compute the net present value of the project. (Negative amount should be indicated by a minus sign.) Net present value
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