Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $280,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. UseTable 12-12. UseAppendix Bfor an approximate answer but calculate your final answer using the formula and financial calculator methods.

Earnings before Depreciation

Year 1$79,000

Year 292,000

Year 365,000

Year 444,000

Year 534,000

Year 625,000

The firm is in a 30 percent tax bracket and has a 9 percent cost of capital.

a.Calculate the net present value.