Calculating Net Present Value (NPV) An initial investment of $97,200 into a new piece of machinery is expected to generate net cash flows of $27,100, $32,700, $48,240 and $15,650 at the end of the first, second, third and fourth year respectively. At the end of the fourth year, the machinery will be sold for $8,500. Calculate the net present value of the investment if the discount rate is 12.5% and recommend whether or not the machinery should be purchased