The Finney Company is reviewing the possibility of remodeling one of its showrooms and buying some new equipment to improve sales operations. The remodeling would cost $100,000 now and the useful life of the project is 12 years. Additional working capital needed immediately for this project would be $20,000; the working capital would be released for use elsewhere at the end of the 12-year period. The equipment and other materials used in the project would have a salvage value of $15,000 in 12 years. Finney's discount rate is 15%. (Ignore income taxes.)
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Click here to view Exhibit 13B-1 and Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.
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What would the annual net cash inflows from this project have to be in order to justify investing in remodeling? (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)