Calculate the project's net present value

Problem 13.22A a-d (Part Level Submission) BioFarm Inc. wants to replace its current equipment with new high-tech equipment. The existing equipment was purchased 5 years ago at a cost of $125,000. At that time, the equipment had an expected life of 10 years, with no expected salvage value. The equipment is being deprecated on a straight-line basis. Currently, the market value of the old equipment is $40,900. The new equipment can be bought for $172,380, including installation. Over its 10-year life, it will reduce operating expenses from $190,100 to $150,000 for the first six years, and from $206,500 to $191,800 for the last four years. Net working capital requirements will also increase by $20,900 at the time of replacement. It is estimated that the company can sell the new equipment for $24,800 at the end of its life. Since the new equipment's cash flows are relatively certain, the project's cost of capital is set at 10%, compared with 15% for an average-risk project. The firm's maximum acceptable payback period is 5 years. Click here to view Py_table. (a) Your answer is correct. Calculate the initial investment amount. Initial investment 152380 SHOW SOLUTION LINK TO TEXT LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Attempts: 1 of 3 used