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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 $ 400,000
Working capital needed $ 77,000
Overhaul of the equipment in two years $ 26,500
Annual revenues and costs:
Sales revenues $ 520,000
Variable expenses $ 265,000
Fixed out-of-pocket operating costs

$

114,000

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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