Replacing old equipment at an immediate cost of

$90,000

and an additional outlay of

$20,000 in

five

years from now will result in savings of

$22,000

per year for

8

years. The required rate of return is

14%

compounded

annually.

Compute the net present value and determine if the investment should be accepted or rejected according to the net present value criterion.

Question content area bottom

Part 1

The net present value of the project is

$ enter your response here.

(Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.)

Part 2

The proposal should be

rejected.

accepted.