Windhoek Mines, Limited, of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. The company estimated the following cash flows related to opening and operating a mine in the area: Cost of new equipment and timbers $ 480,000 Working capital required $ 170,000 Annual net cash receipts $ 185,000* Cost to construct new roads in three years $ 54,000 Salvage value of equipment in four years $ 79,000

*Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth.

The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The companys required rate of return is 18%.

1. What is the net present value of the proposed mining project?