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The Spartan Technology Company has a proposed contract with the Digital Systems Compary of Michigan. The initial investment in land and equipment will be $80,000.

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The Spartan Technology Company has a proposed contract with the Digital Systems Compary of Michigan. The initial investment in land and equipment will be $80,000. Of this amount, $70,000 is subject to five year MACRS deprechation. The balance is in nondepreciable property. The contract covers six years: at the end of six years, the nondepreciable assefs will be soid for $10,000. The depreciated assets will have zero resale value. Use Iable 1212 The contract will require an additional investment of $41.000 in working capilal at the beginning of the first year and, of this amount. $21,000 will be returned to the Spartan Technology Company after slix years. The investment will produce $33,000 in income before depreciation and taxes for each of the six years. The corporation is in a 25 percent tax bracket and has a 14 percent cost of capital. 0. Calculate the net present value. (Do not round intermediate calculotions and round your answer to 2 decimal pleces.) The Spartan Technology Company has a proposed contract with the Digital Systems Compary of Michigan. The initial investment in land and equipment will be $80,000. Of this amount, $70,000 is subject to five year MACRS deprechation. The balance is in nondepreciable property. The contract covers six years: at the end of six years, the nondepreciable assefs will be soid for $10,000. The depreciated assets will have zero resale value. Use Iable 1212 The contract will require an additional investment of $41.000 in working capilal at the beginning of the first year and, of this amount. $21,000 will be returned to the Spartan Technology Company after slix years. The investment will produce $33,000 in income before depreciation and taxes for each of the six years. The corporation is in a 25 percent tax bracket and has a 14 percent cost of capital. 0. Calculate the net present value. (Do not round intermediate calculotions and round your answer to 2 decimal pleces.)

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