Problem 11-13 Market prices Photographic laboratories recover and recycle the silver used in photographic film. Stikine River Photo is considering a purchase of improved equipment for their laboratory at Telegraph Creek. Here is the information they have: The equipment costs $100,000 and will cost $80,000 per year to run. It has an economic life of 10 years but can be depreciated over five years by the straight-line method. It will recover an additional 5,000 ounces of silver per year. Silver is selling for $40 per ounce. Over the past 10 years, the price of silver has appreciated by 4.5% per year in real terms. Silver is traded in an active, competitive market. Stikine's marginal tax rate is 35%. Assume U.S. tax law. Stikine's company cost of capital is 8% in real terms. The nominal interest rate is 6%. What is the NPV of the new equipment?