Johnson Furniture is considering upgrading its production equipment. Current equipment can be sold for $40,000.

• New equipment cost: $180,000
• Additional working capital needed: $50,000
• Expected annual cash inflows:
  • Year 1: $40,000
  • Year 2: $140,000
  • Year 3: $140,000
• Equipment lifespan: 3 years
• Required rate of return: 9%
• Calculate the NPV and recommend whether to purchase the new equipment.