As a supervisor in Wealth Health Services, you oversee the investment activity of a number of clients as well as train interns and new staff in the company. Anthony, a college junior, is in just the second week of his $12-$week internship. He is helping a client evaluate an asset replacement decision while following a similar example from a different client. He presents the asset replacement information and his analysis to you, as follows.

Original cost of existing asset

Market value of existing asset today

Book value of existing asset today

New replacement asset cost

New replacement asset useful life $($years$)$

Estimated salvage value of new replacement asset at end of useful life

Estimated additional annual operating cash inflows from new replacement asset

$$78,100$

$$78,100$

$$4,900$

$$4,900$

$$147,970$

Minimum required return

$10$

$$4,900$

$$25,100$

Effective tax rate

$10\%$

$28\%$

Anthony's Analysis

Proceeds from sale of existing asset

Cost of new replacement asset

Present value of new asset's operating cash flows

$$25,100$ ordinary annuity, $n=10,i=10\%$

$$25,1006\mathrm{.}14457$

$$154,228\mathrm{.}71$

Total NPV of replacement

$$11,158\mathrm{.}71$

Determine the correct Npv of the investment