A driver needs new tires for her car and is trying to decide if she should purchase low rolling resistance tires. The regular tires cost $300 (for all 4 tires) and will last 3 years. The low rolling resistance tires cost $400 and will also last 3 years, saving $50 per year in gas. What is the NPV for choosing the low rolling resistance tires if the expected return she is getting on her investments is 10%?

A new graduate is deciding which dress shoes to purchase for his new job. Regular quality shoes that will last 1 year can be purchased for $100, but premium shoes that last 2 years cost $160. The purchases will need to be left on the credit card, where the student is paying an effective 32% interest rate. What is the NPV of purchasing the premium shoes instead of a pair of regular quality shoes in each of the first two years?