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Gallant Sports is considering the purchase of a new rock-climbing facility. The company estimates that the construction will require an initial outlay of $352,000. Other
Gallant Sports is considering the purchase of a new rock-climbing facility. The company estimates that the construction will require an initial outlay of $352,000. Other cash flows are estimated as follows:
Year 1 | $(61,000) |
Year 2 | $140,000 |
Year 3 | $210,000 |
Year 4 | $130,000 |
Assuming the company limits its analysis to four years due to economic uncertainties, determine the net present value of the rock-climbing facility if the required rate of return is 8%.
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