A university student painter is considering the purchase of a new air compressor and paint gun to replace an old paint sprayer. $($Both

items belong to Class $9$ and have a $25\%$ CCA rate.$)$ These two new items cost $$12,000$ and have a useful life of four years, at which

time they can be sold for $$1,600.$ The old paint sprayer can be sold now for $$500$ and could be scrapped for $$250$ in four years. The

entrepreneurial student believes that operating revenues will increase annually by $$8,000.$ The tax rate is $22\%$ and the required rate of

return is $15\%.$

What is the NPV of the new equipment? $($Do not round intermediate calculations. Round the final answer to $2$ decimal places. Omit

$sign in your response.$)$

NPV $

Should the purchase be made?

Yes

No