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Mary is considering opening a hobby and craft store. She plans to operate the business for six years. Mary requires a minimum 6% return on
Mary is considering opening a hobby and craft store. She plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the NPV of this venture?
Cost of equipment | $335,000 |
Working capital needed | $185,000 |
Annual cash inflow from sales | $195,000 |
Annual cash outflow for operating costs | $115,000 |
Overhaul (repair) of equipment in year 3 | $17,500 |
Salvage value of equipment | $20,000 |
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