Adriana is the financial advisor for her company and is considering the purchase of excavation equipment which will cost $54,000. The purchase of this equipment is expected to save her company $6,413 every year for 10 years. At the end of the 10 years, she expects the excavation equipment to have a residual (inflow) value of $12,700. The company requires a 6.1% rate of return. Enter all quantities with the correct sign (+ or -)

1) What is the Net Present Value (NPV) of this equipment investment? (If the NPV is negative, enter it as a negative number. If the NPV is zero, enter 0.). Round the answer to two decimal places.

CFo $

CO1 $

FO1

CO2 $

FO2

I %

NPV $

2) Should this equipment purchase be made according to the NPV criterion?

Yes

No