The Harvey Co. is considering the purchase of new Garland brand energy-efficient refrigerators for its chain of 60 restaurants.

Fred Harvey would like to engage in further financial analysis of this purchase and installation project. In addition to the option of purchasing the Garland brand refrigerators, he is also considering some less-expensive models from Bolger Appliances. The Bolger units will cost only $6,000 each, and it will cost the same ($100,000) to install all 60. These refrigerators will have a useful life of only four years and will produce a net cost savings of only $100,000 per year because they are not as energy-efficient. Based on careful analysis of his companys financial position and goals, Mr. Harvey has set the discount rate at 12 percent. Calculate NPV for both projects and interpret the results.

What other factors do you think Mr. Harvey should consider in his project-selection decision?