Directions: Find the Net Present Value and Benefit Cost Ratio for the following situation. Show your work in a step by step format.

A layoff is expected to have an immediate restructuring charge of $7,500 and save money for the firm according to the schedule below. The firms weighted average cost of capital is 11 percent (which may be used as the discount rate for average-risk investments).

Year Cash Inflows

1 $4,375

2 $ 0

3 $8,750

4 $4,100