VE PUM Genetics Engineering is considering the purchase of some new equipment that will coll $320,000 installed. The equipment will produce product that must be FDA approved and this will require at least a year. Yeur 1, the company will have net cash outflow of $200,000. Year 2 to 5, the company will generate net cash inflows of $50,000, 5150,000, $240,000, and $330,000. At the end of 5 years the equipment and the product will be obsolete. I the firm's costs of capital is 12%, should they invest in the new equipment? Yes, NPV = $12,376 Yes, NPV - 52,072 No, NPV - $12,170 - No, NPV --$1,256 Previous Page Next Page Page 10 of 16