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( Ignore income taves in this problem ) Steph Lymn is considering starting a small catering business. She woutd need to purchase a delivery van

(Ignore income taves in this problem) Steph Lymn is considering starting a small catering business. She woutd need to purchase a delivery van and various equipment costing $155,000 to equip the business and another $60,000 for inventories and other working capital needs. Rent for the building used by the business will be $35,000 per year. Steph's marketing studies indicate that the annual cash inflow from the business will amount to $120,000. In addition to the building rent, annual cash outflow for operating costs will amount to $40,000. Steph wants to operate the catering business for only six years She estimates that the equipment could be sold at that time for 4% of its ofiginal cost. Steph uses a 16% discount rate.
Required:
Compute the net present value of this investment.
Would you advise Steph to make this investment?
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