A Company is considering purchasing a piece of new equipment for $1,000,000. The equipment will reduce cost by $280,000 (assume the savings occurs at the end of the year) per year for 5 years. At that time the salvage value of the equipment is $50,000. Current cash inflow for is $1,200,000. The Company requires a 6% ROI.

Disregard the effect of depreciation on the new equipment.

Compute net present value (use present value tables) Show all calculations