Fitch minster Armored Car can purchase a new armored car for $200,000 that will provide net annual cash flows of $50,000 per year in year 1 and 2 and $60,000 per year in years 3, 4, and 5. Fitch has a cost of capital of 8%.

a. Calculate the NPV of the new armored car.

b. Calculate the profitability of the new armored car.