Calculate the net present value of the equipment if the discount rate is based on a rate of 8 percent rate of return and PVA is 1.

	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. 42,020.

**Note from Member: I understand the formula to be the net cash generated each year to be multiplied by 5.74664 which is PVAF(8%,8YEARS). Ok. I also understand that the sum discounted cash flow should then be subtracted from that. ( In this case: 30,424 x 5.74664) = 174,836 which is rounded. NPV should = 174,836 - purchase cost $90,000. Can you tell me where I am going wrong please?