Frank Eiroa is considering the purchase of an engine lift for use in his marine repair business.

He has determined that a used lift is available for \($5,500\). The engine lift has an estimated useful life of eight years and a residual value of zero. Currently, Frank rents engine lifts as needed. If the lift is purchased, annual rental payment of \($1,400\) would be saved.

The cost of capital is 16 percent.

Required: Calculate the net present value of the engine lift purchase.