Windhoek Mines, Ltd$.,$ of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the

company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would

be associated with opening and operating a mine in the area:Working capital required $$100,000$

Annual net cash inflows$*$ $$160,000$

Cost to construct new roads in three years $$49,000$

Salvage value of equipment in four years $ $74,000*$Receipts from sales of ore, less out$-$of$-$pocket costs for salaries, utilities, insurance, etc.

The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for

reinvestment elsewhere. The company's required rate of return is $18\%.$

Required:

a$.$ Determine the net present value of the proposed mining project. $($Hint: Use Microsoft Excel to calculate the discount factor$($s$).)$

Note: Do not round intermediate calculations and PV factor. Round the final answers to the nearest whole dollar. Any cash

outflows should be indicated by a minus sign.

b$.$ Should the project be accepted?

Yes

No