4. A nice set of bounce houses and associated equipment for entertaining youngsters at events costs $28,000 at the present time. You think you can earn a net return of $6,000 at the end of year 1, $6,200 at the end of year 2, $6,400 at the end of year 3, and $6,500 at the end of year 4. The equipment will be worth $8,600 when you are done using it at the end of year 4. Calculate the net present value of the bounce house equipment using a discount rate of 6.5%. 5. Based on NPV, which investment looks better? Explain why this comparison is not a good idea. 6 6. Find the annuity which is equivalent each of the above investments NPV (questions 3 and 4). Based on the annuity equivalent, which investment is better? Why? 8 7. Based on the information so far, which one would you choose? Why