2.1 You can make an investment that will immediately cost $52,000. If you make the investment, your after-tax operating profit will be $13,000 per year for five years. After the five years, the profit will be zero, and the scrap value also will be zero. You will finance the investment with internally generated funds and receive the profit at the end of each year.

a. What is the net present value equation for this investment?

b. If your discount rate is 7 percent, will you make the investment?

c. If your discount rate is 9 percent, will you make the investment?

d. Are your answers to parts b and c the same or different? Why?