Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $51700, and will have a salvage value of $5,060 after eight years. Using the new plece of equipment will increase Grady's annual cash flows by $6,130. Grady has a hurdle rate of 12%. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $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.) Present Value

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

c. What is the net present value of the equipment purchase? (Negative value should be indicated by a minus sign. Round your Prosent Value 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.) Net Present Value

d. Based on financial factors, should Grady purchase the equipment? Yes O No