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You have been offered a five-year contract to provide component parts for a large manufacturer. The costs and revenues associated with this project are below.

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You have been offered a five-year contract to provide component parts for a large manufacturer. The costs and revenues associated with this project are below. At the end of the five years, the working capital will be released and may be used elsewhere. The equipment will be depreciated over the life of the contract using straight-line depreciation. Your discount rate is 10%) cost and revenue information associated with the project is below. Cost of special equipment Working capital required Refurbishing equipment in 3 years Salvage value of equipment in 5 years 160,000 100,000 30,000 5,00 Annual revenue and costs (5 years) Sales revenue from parts Cost of parts sold Salaries, shipping, etc. Depreciation on special equipment 750,000 400,000 270,000 31,000 a. b. c. What is the net present value of this project? Should the contract be accepted? What non-financial factors should be considered? ears Cosh Flows (o% Factor Peseut olue

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