Sunny Days Corporation is deciding whether to automate one phase of its production process. The equipment has a

sixminus

year

life and will cost $370,000. Projected net cash inflows from the equipment are as follows:

Year 1	$140,000
Year 2	$100,000
Year 3	$80,000
Year 4	$180,000
Year 5	$76,000
Year 6	$93,000

Sunny Days Corporation's hurdle rate is 12%. Assume the residual value is zero.

What is the net present value of the equipment?

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Present Value of $1

Periods	10%	12%	14%	16%
1	0.909	0.893	0.877	0.862
2	0.826	0.797	0.769	0.743
3	0.751	0.712	0.675	0.641
4	0.683	0.636	0.592	0.552
5	0.621	0.567	0.519	0.476
6	0.564	0.507	0.456	0.410

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Present Value of Annuity of $1

Periods	10%	12%	14%	16%
1	0.909	0.893	0.877	0.862
2	1.736	1.690	1.647	1.605
3	2.487	2.402	2.322	2.246
4	3.170	3.037	2.914	2.798
5	3.791	3.605	3.433	3.274
6	4.355	4.111	3.889	3.685

A.

$96,403

B.

$107,971

C.

($96,403)

D.

$11,568