1. Absolut Fitness is considering an upgrade to their entire line of premium gym equipment. The initial investment would cost $750,000 and would increase annual operating expenses by S15,000. The new line of equipment would have a useful life of 12 years and a salvage value of $35,000. The old equipment had a salvage value of $15,000. The new equipment is expected to increase membership by 200 people on average per year, each of whom will pay a yearly membership fee of $500. Absolut expects a 5% rate of return and is in the 30% tax bracket. What is the net present value of the project