1) A carpet manufacturer, whose discount rate is 89, can purchase texturizing equipment for $1,250,000 to process yarn. Incremental income before amortization from sales of texturized carpets is projected over five years as $95,000, $155,000, $257,000, $625,000 and $215,000, respectively. Amortization is straight-line. The company believes that the fashion will pass and demand in Year 6 will all but disappear. The machine can be sold at the end of Year 5 for $200,000. What is the net present value of this venture? (8 marks)