Holmes Industries is deciding whether to automate one phase of its production process. The manufacturing equipment has a six-year life and will cost $910,000. Projected net cash inflows are as follows: Requirement 1. Compute this project's NPV using Holmes's 14% hurdle rate. Should Holmes invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX. Use parentheses or a minus sign for a negative net present value.) Requirement 1. Compute this project's NPV using Holmes's 14% hurdle rate. Should Hoimes invest in the equipment? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X net present value.) Holmes Industries (1) invest in the equipment. Requirement 2. Holmes could refurbish the equipment at the end of six years for $104,000. The refurbished equipment could be used one more year, providing $77,000 of net cash inflows in year 7 . Additionally, the refurbished equipment would have a $55,000 residual value at the end of year 7 . Should Holmes invest in the equipment and refurbish it after six years? (Hint: In addition to your answer to Requirement 1, discount the additional cash outflow and inflows back to the present value.) Calculate the NPV of the refurbishment. (Enter any factor amounts to three decimal places, X.XCX. Use parentheses or a minus sign for cash outflows and for a negative net present value.) The refurbishment provides a (2) NPV. The refurbishment NPV is (3) to overcome the original NPV of the equipment. Therefore, the refurbishment (4) alter Holmes Industries' original decision regarding the equipment investment. \begin{tabular}{ll} \hline Year 1 \$ & 262,000 \\ Year 2 & 254,000 \\ Year 3 & 222,000 \\ Year 4 & 215,000 \\ Year 5 & 200,000 \\ Year 6 & 175,000 \\ \hline \end{tabular}