Lindas Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows:

Assume straight line depreciation method is used.

Required:

Help LLT evaluate this project by calculating each of the following:

3. Net present value.

Calculate net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.)

Initial investment (2 limos) Useful life $1,200,000 10 years $ 130,000 Salvage value Annual net income generated LLT's Cost of capital 108,000 14% Table or Calculator Function: Cash Outflow (Beginning of the Year) Present Value Table or Calculator Function: Cash Inflow (for Next 10 Years) Table Factor Present Value Table or Calculator Function: Cash Inflow (for 10th Year) Table Factor