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Table 1 2 - 1 2 Depreclation percentages ( expressed in decimals ) The Spartan Technology Company has a proposed contract with the Digital Systems

Table 12-12 Depreclation percentages (expressed in decimals) The Spartan Technology Company has a proposed contract with the Digital Systems Company of Michigan. The initial investment in
land and equipment will be $140,000. Of this amount, $100,000 is subject to five-year MACRS depreciation. The balance is in
nondepreciable property. The contract covers six years; at the end of six years, the nondepreciable assets will be sold for $40,000.
The depreciated assets will have zero resale value. Use Table 12-12.
The contract will require an additional investment of $44,000 in working capital at the beginning of the first year and, of this amount,
$24,000 will be returned to the Spartan Technology Company after six years.
The investment will produce $42,000 in income before depreciation and taxes for each of the six years. The corporation is in a 25
percent tax bracket and has a 9 percent cost of capital.
a. Calculate the net present value. (Do not round intermediate calculations and round your answer to 2 decimal places.)
Net present value
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