(Appendix 13A)Vernon Company has been offered a seven-year contract to supply a part for the military.After careful study,the company has estimated the following data relating to the contract: 
It is not expected that the contract would be extended beyond the initial contract period.The company's discount rate is 10%.(Ignore income taxes in this problem. )
Required:
Use the net present value method to determine if the contract should be accepted.Round all computations to the nearest dollar.
Definitions:
Prospectus
A formal legal document that is required by and filed with securities regulatory bodies that provides details about an investment offering to the public.
Venture Capital
Financing provided by investors to startup companies and small businesses with long-term growth potential in exchange for an equity stake.
Venture Capitalist
A Venture Capitalist is an investor who provides capital to startups or small companies looking to expand but do not have access to equities markets.
Key Considerations
Important factors or aspects that need to be taken into account when making a decision or evaluating a situation.
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