Magenta Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment:

Old Equipment New Equipment

Cost $81,120 Cost $38,800

Accumulated depreciation $40,700 Estimated useful life 8 years

Remaining life 8 years Salvage value in 8 years $4,800

Current salvage value $10,180 Annual cash operating costs $29,900

Salvage value in 8 years $0

Annual cash operating costs $35,300

Depreciation is $10,140 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,800.

q-1.Calculate the net present value in dollars , assuming a 15% rate of return. (Ignore income taxes.)