Acquiring Assets: NPV Calculation In-Class Exercise Equipment Cost: Expected Useful Life: Expected Salvage Value: $27,000 5 years $6,500 A. Projected Increase in Business Year 1 Year 2 Year 3 Year 4 Year 5 $ 3,100.00 $ 5,500.00 $ 7,700.00 $ 10,400.00 $ 11,250.00 8. Projected Impact on Existing Business Year 1 Year 2 Year 3 Year 4 Year 5 (5900.00) ($1.050.00) ($1.050.00) ($1.100.000 ($1,125.00) C. Net Projected Increase Year 1 Year 2 Year 3 Year 4 Year 5 D. Net Present Value Discount Rate Year 1 Year 2 Year 3 Year 4 Year 5 10% 0.9091 0.8264 0.7513 0.6830 0.6209 12% 0.8929 0.7972 0.7118 0.6355 0.5674 10% 12% E. Net Present Value Results Year 1 Year 2 Year 3 Year 4 Year 5 Salvage Value Total Inflow Total Outflow Net Result Should we invest in the equipment if our rate of return is 10%? Should we invest in the equipment if our rate of return is 12%? Why