Boulder Creek Industries is considering an investment in equipment based on the following estimates:

Cost of equipment	$3,000,000
Residual value	200,000
Useful life	10 years

a. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $800,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter.

Net present value $ ???

b. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value.

Annual Net Cash Flow	$400,000	$600,000	$800,000
Net present value	$ ???	$ ???	$ ???

c. Determine the net present value of the equipment, assuming a desired rate of return of 15% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value.

Annual Net Cash Flow	$400,000	$600,000	$800,000
Net present value	$ ???	$ ???	$ ???

d. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 12%. Round to the nearest dollar.

Annual Net Cash Flow $ ???