2.Reynolds Leasing is a company that purchases equipment and then leases the equipment to hospitals.Reynolds is considering the purchase of diagnostic equipment that would cost them $300,000 to purchase.Reynolds would lease out the equipment to a hospital on a four-year lease, and then sell the equipment at a reduced price.Based on the lease payments that Reynolds would receive from the hospital, the maintenance costs, the expected resale price, and other issues, Reynolds is predicting the annual net cash flows as shown below:

Year

Net Cash Flow

Present Value

Year 0

($260,914)

Year 1

$80,000

Year 2

$94,400

Year 3

$88,400

Year 4

$41,600

Net Present Value:

Note the first year Reynolds Leasing has a negative cash flow.Reynolds Leasing's discount rate is 9%.What is the net present value of Reynolds Leasing's entire investment over this five year period?