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7. A pharmacy has purchased a small equipment for delivery of prescriptions. The cost of the equipment is $50,000 with a useful life of 6

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7. A pharmacy has purchased a small equipment for delivery of prescriptions. The cost of the equipment is $50,000 with a useful life of 6 years and salvage value of $1,500. Overhaul of the equipment in the 5 th year is required which will cost about $5,000 This new equipment should increase revenues by at least $100,000 and reduce labor cost by $20,000 per year. The cost of these prescriptions will be about $50,000. Other annual out-of-pocket operating costs are $15,000 per year. With a discount factor of 18%, what is the NPV of this project

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