Question 4 - Harper Company has been offered a five-year contract to provide component parts for a large manufacturer. Calculate the net present value and determine whether the contract should be accepted based on the following data relate to the contract.

Costs and revenues due to the contract would be:

Cost of special equipment.............................................................................	$160,000
Working capital required................................................................................	$100,000
Relining of the equipment in three years....................................................	$30,000
Salvage value of the equipment in five years............................................	$5,000
Annual revenues and costs:
Sales revenue from parts...........................................................................	$750,000
Cost of parts sold........................................................................................	$400,000
Out-of-pocket operating costs (for salaries, shipping, and so forth)...	$270,000

At the end of five years the working capital would be released for use elsewhere in the company.

Harper Company uses a discount rate of 10%.