Lander Company has an opportunity to pursue a capital budgeting project with a five-year time...
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Accounting
Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Lander estimated the following costs and revenues for the project:
Cost of equipment needed
$
250,000
Working capital needed
$
60,000
Overhaul of the equipment in two years
$
18,000
Annual revenues and costs:
Sales revenues
$
350,000
Variable expenses
$
180,000
Fixed out-of-pocket operating costs
$
80,000
The piece of equipment mentioned above has a useful life of five years and zero salvage value. Lander uses straight-line depreciation for financial reporting and tax purposes. The company
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