Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,900, and will have a salvage value of $5,010 after eight years. Using the new piece of equipment will increase Grady's annual cash flows by $6,080. Grady has a hurdle rate of 12%. (Future Value of $1,Present Value of $1,Future Value Annuity of $1,Present Value Annuityof $1.)(Use appropriate factor from the PV tables.)

a.What is the present value of the increase in annual cash flows?(Round your answer to 2 decimal places.)

b.What is the present value of the salvage value?(Round your answer to 2 decimal places.)

c.What is the net present value of the equipment purchase?(Negative value should be indicated by a minus sign. Round your intermediate calculation and final answer to 2 decimal places.)

d.Based on financial factors, should Grady purchase the equipment?

Yes