Hillary is the financial advisor for her company...
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Hillary is the financial advisor for her company and is considering the purchase of excavation equipment which will cost $72,000. The purchase of this equipment is expected to save her company $8,840 at the end of every year for 9 years. At the end of the 9 years, she expects the excavation equipment to have a residual (inflow) value of $13,600. The company requires a 4.9% rate of return. Round PV to the nearest cent. Round NPV to the nearest whole number. 1) What is the Net Present Value (NPV) of this equipment investment? Cash Inflows Cash Inflows Payments (Savings) Residual (Inflow) P/Y = C/Y = N 1/Y = PV s PMT - 5 FV = (If the NPV is negative, enter it as a negative number. If the NPV is zero, enter 0.) NPV = $ 2) Should this equipment purchase be made according to the NPV criterion? Yes
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