Bowman Corporation is considering an investment in special-purpose equipment to enable the company to obtain a four-year government contract for the manufacture of a special item. The equipment costs $95,000 and would have no salvage value when the contract expires at the end of the four years. Estimated annual operating results of the project are as follows. Revenue from contract sales $ 306,000 Expenses other than depreciation $ 211,000 Depreciation (straight-line basis) 23,750 234,750 Increase in net income from contract work $ 71,250 Given the above stated information, how would I solve for the net present value of the proposal to undertake contract work, discounted at annual rate of 8%?
Bowman Corporation is considering an investment in special-purpose equipment to enable the company to obtain a four-year government contract for the manufacture of a special item. The equipment costs $95,000 and would have no salvage value when the contract expires at the end of the four years. Estimated annual operating results of the project are as follows.
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Revenue from contract sales |
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$ |
306,000 |
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Expenses other than |
$ |
211,000 |
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Depreciation (straight-line basis) |
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23,750 |
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234,750 |
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Increase in net income from contract work |
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$ |
71,250 |
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Given the above stated information, how would I solve for the
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