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Outdoor Sports is considering adding a putt putt golf course toits facility. The course would cost $172,000, would be depreciatedon a straight-line basis over its 5-year life, and would have azero salvage value. The sales would be $86,500 a year, withvariable costs of $27,650 and fixed costs of $12,250. In addition,the firm anticipates an additional $17,300 in revenue from itsexisting facilities if the putt putt course is added. The projectwill require $2,850 of net working capital, which is recoverable atthe end of the project. What is the net present value of thisproject at a discount rate of 13 percent and a tax rate of 35percent?
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