(Ignore income taxes in this problem.) Betty is considering opening a craft store. She would...
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(Ignore income taxes in this problem.) Betty is considering opening a craft store. She would need $60,000 to remodel and furnish the store and another $30,000 for inventories and other working capital needs. Rent on the building used by the business will be $10,000 per year. Betty estimates that the annual cash inflow from the business will amount to be $44,000. In addition to building rent, other annual cash outflows for operating costs will amount to $17,000. Betty plans to operate the business for only seven years. She estimates that the furnishings could be sold at that time for about $2,000. Betty requires a 5% return on this investment.
Required:
What is the net present value of this investment opportunity?
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