Question: ing is evaluating the laundromat project, a 2-year project that would involve buying equipment for 16,000 dollars that would be depteciated to zero over 2
ing is evaluating the laundromat project, a 2-year project that would involve buying equipment for 16,000 dollars that would be depteciated to zero over 2 years using straight-line depreciation. Cash flows from capital spending dollars in year 2. would be $0 in year 1 and 22,000 Relevant annual revenues are expected to be 50,000 dollars in year 1 and 50,000 dollars in year 2. Relevant expected ar 1 and one fixed cost in year 2 of the project. Yesterday, Silver Sun Recycling signed a deal with Indigo River Marketing to al variable costs from the project are expected to be 14,000 dollars in year 1 and 14,000 dollars in year 2. Finally, the firm has no fixed develop an advertising campaign. The 2 years from today if the lau terms of the deal require Siliver Sun Recycling to pay Indigo River Marketing either 86,000 dollars in undromat project is pursued or 66 000 dollars in 2 years from today it the laundromat project is not pursued. The percent and the cost of capital for the laundromat project is 17/42 percent. What is the net present value of the laundromat project? Number
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