Vernal Company has been offered a seven-year contract to supply a part for the military. After careful study, the company has developed the following estimated data relating to the contract:

Cost of equipment needed

$300,000

Working capital needed to carry inventories

$50,000

Annual Net Cash Inflow

$90,000

Salvage Value of Equipment

$10,000

The equipment above would be in Class 7 with a 15% CCA rate. The company would take the maximum CCA allowable each year. It is not expected that the contract would be extended beyond the initial contract period. The company's after-tax cost of capital is 10%, and the tax rate is 30%.

Required:

Use net present value analysis to determine whether or not the contract should be accepted. (Round all calculations to the nearest dollar.)