Current advertising expense is $3,600 per year. Wages run $15,000 per year. The owner feels he can do better if he increases advertising by 10% per year over the next two years, which will allow him to reduce his wage expense by 5% each year for the same period. If he uses a 5% interest rate for his decisions, what is the net present value of this option? $780 $725 $720 $1,394 Question 8 (1 point) Our owner is trying to decide if he wants to buy new equipment. He can buy a new machine for $10,000 that will reduce utility expense ($3,600 per year) by 5% per year and labor expehse ( $18,000 per year) by 10% per year. He is using an interest rate of 5% and a time horizon of 5 years for his decision. What is the net present value of this purchase? Negative $1,429 Negative $8,020 Positive $1,429 Positive $8,020 Current advertising expense is $3,600 per year. Wages run $15,000 per year. The owner feels he can do better if he increases advertising by 10% per year over the next two years, which will allow him to reduce his wage expense by 5% each year for the same period. If he uses a 5% interest rate for his decisions, what is the net present value of this option? $780 $725 $720 $1,394 Question 8 (1 point) Our owner is trying to decide if he wants to buy new equipment. He can buy a new machine for $10,000 that will reduce utility expense ($3,600 per year) by 5% per year and labor expehse ( $18,000 per year) by 10% per year. He is using an interest rate of 5% and a time horizon of 5 years for his decision. What is the net present value of this purchase? Negative $1,429 Negative $8,020 Positive $1,429 Positive $8,020