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The land costs $300,000, the building costs $600,000, the equipment costs $250,000, and $100,000 additional working capital is required. It is expected that the product

The land costs $300,000, the building costs $600,000, the equipment costs $250,000, and $100,000 additional working capital is required. It is expected that the product will result in sales of $750,000 per year for 10 years, at which time the land can be sold for $400,000, the building for $350,000, and the equipment for $50,000. All of the working capital would be recovered at the end of year 10. The annual expenses for labor, materials, and all other items are estimated to total $475,000 per year. The company requires a MARR of 15% per year on projects of comparable risk. What is the present worth of the investment?

a.

$2568.70

b.

$4,680.30

c.

$3,526.50

d.

-$3,680.30

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