As figure 8.1 suggests, we effectively have an eight-year annuity of $20,000-14,000 = $6,000 per year along with a single lump-sum inflow of $2,000 in eight year. Calculating the present value of the future cash follow thus comes down to the same type of problem we considered in chapter 5. The total present value is: when we compare this to the $30,000 estimated cost, the NPV is