Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $460,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

		Earnings before Depreciation
Year 1		$	149,000
Year 2			200,000
Year 3			130,000
Year 4			83,000
Year 5			75,000
Year 6			42,000

The firm is in a 25 percent tax bracket and has a 12 percent cost of capital.

a. Calculate the net present value.