Problem 6 (20 points)
LakeFront Company is considering investing in a new dock that
The company expects to use the dock for several years, after
which the new dock will be sold for its salvage value. Here is
information about the proposed investment:
	Purchase price of new dock				$1,680,000
	Useful life in years				5
	Salvage value of dock at end of useful life			$900,000
	Annual revenues from new dock				$1,320,000
	Annual operating costs of new dock			$1,146,000
	Annual depreciation expense on new dock*			$156,000
	*Included in annual operating costs above
	Minimum desired rate of return				9%
REQUIRED: Analyze the proposed investment using the
	discounted cash flow method. Comment on
	whether LakeFront should invest in the new dock.