Calculate the net present value of the equipment if the discount rate is based on a rate of 8 percent rate of return.

	equipment
Purchase cost when new	$90,000
Salvage value now	$42,000
Investment in major overhaul needed in next year	$55,000
Salvage value in 8 years	$15,000
Remaining life	8 years
Net cash flow generated each year	$30,425

1. 130,147
2. 127,946
3. 104,842
4. 159,841