10 pts Company has an opportunity to upgrade a piece of equipment at a cost of $480,000. The new erant is expected to generate the following cash flows: Year 1 $80,000 Year 2 $150,000 Year 3 $50,000 Year 4 $140,000 Year 5 $62,000 Year 6 $56,000 Company X assumes a hurdle rate of 14%. Company X's manager believes there will be an ability to refurbish the equipment at the end of the equipment's 6-year life. The refurbishment is expected to add one year of useful life to the equipment and will cost $50,000. If the equipment is not refurbished, the salvage value will be $0 at the end of year 6. If the equipment is refurbished, the salvage value will be $40,000 at the end of year 7. What is the NPV of just the refurbishment, assuming the cash inflow in year 7 is $85,000? Company X assumes a hurdle rate of 14%. Company X's manager believes there will be an ability to refurbish the equipment at the er refurbishment is expected to add one year of useful life to the equipment and will cost $5 refurbished, the salvage value will be $0 at the end of year 6. If the equipment is refurbish at the end of year 7. What is the NPV of just the refurbishment, assuming the cash inflo Present Value of $1 Periods 10% 12% 14% 16% 0.909 0.893 0.877 0.862 2 2 0.826 0.797 0.769 0.743 3 0.751 0.712 0.675 0.641 4 0.683 0.636 0.592 0.552 5 0.621 0.567 0.519 0.476 6 0.564 0.507 0.456 0.410 7 0.513 0.452 0.400 0.354 8 0.467 0.404 0.351 0.305 9 9 0.424 0.361 0.308 0.263 10 0.386 0.322 0.270 0.227 9 0.424 0.361 0.308 10 0.386 0.322 0.270 0.227 Present Value of Annuity of $1: Periods 10% 12% 14% 16% 6 4.355 4.111 3.889 3.685 7 4.868 4.564 4.288 4.039 8 5.335 4.968 4.639 4.344 9 5.759 5.328 4.946 4.607 10 6.145 5.650 5.216 4.833 O $50,000 O $11,200 O $24,500 $27,200