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Lawton Investment's of Southern California is taking on an investment project that will manufacture an operating cash flow of $175,000 at the end of each
Lawton Investment's of Southern California is taking on an investment project that will manufacture an operating cash flow of $175,000 at the end of each year for three years. The initial cash required for equipment will be $370,000. The equipment can be sold for $22,000 (before tax) at the end of the project. The project requires $35,000 of net working capital that will be fully recovered. The tax rate is 25%. What is the net present value of the project if the required rate of return is 14 percent?
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