Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of

$11,000,000

on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to

$3,000,000

per year for each of the next

6

years. In year

6

the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at

$0.9

million. Thus, in year

6

the investment cash inflow totals

$3,900,000.

Calculate the project's NPV using a discount rate of

10

percent.

Question content area bottom

Part 1

If the discount rate is

10

percent, then the project's NPV is