Calculations of NPV for Option #1 Year 0 1 2 3 4 5 6 7 Purchase Price ($75,000) Maintenance ($2,500) ($2,500) ($2,500) ($2,500) ($2,500) ($2,575) ($2,652.25) Materials ($20,000) ($10,000) ($10,000) ($10,000) ($10,000) ($10,000) ($10,000) Salvage Labor ($50,000) ($51,500) ($53,045) ($54,636.35) ($56,275.44) ($57,963.03) ($59,702.61) Total Cost ($75,000) ($72,500) ($64,000) ($65,545) ($67,136.35) (68,775.44) ($70,538.03) ($72,354.86) Revenues $50.000 $113,000 $125,000 $125.000 $150.000 $150.000 Total Cash Flow ($75,000) ($72,500) ($14,000) $47.455 $57,893.65 $56.224.56 $79.461.97 $77.645.14 Return Rate 8% 1.0 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 Present Value ($67,127.25) ($12,002.20) $37,669.77 $42.551.832 $38.266.43 $50,076.93 $45.305.93 Sum of PV = $134,740.97 - Initial Investment ($75,000) = NPV = $59,740.97