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Question 6 of 7 Adrian Sonnetson, the owner of Vermillion Motors, is considering the addition of a paint and body shop to his automobile dealership.
Question 6 of 7 Adrian Sonnetson, the owner of Vermillion Motors, is considering the addition of a paint and body shop to his automobile dealership. Construction of a building and the purchase of necessary equipment is estimated to cost $786,600, and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Sonnetson's required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows: Revenue $639.000 Less: Material cost 70.800 Labor 150,400 Depreciation 78,660 Other 9,000 Income before taxes 330,140 Taxes at 40% 132,056 Net Income $198.084 Click here to view tactor tables Determine the net present value of the investment in the paint and body shop. (Round present value factor calculations to decimal places, es 1.2151 and final answer to O decimal place, s. 125. Enter negative amounts using either a negative sin preceding the number eg -45 or parentheses cs. (45) Net present value $ ment.player/index.htmiaunchid=242ae887-617c-4dc-b670-3230061960/questions ework Question 6 of 7
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