Webster , Inc., is considering the purchase of a patent that has a cost of $85,000 and an estimated revenue producing life of 4 years. Webster has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows:

year 1 year 4 Net income year2 $6,900 $19,500 year3 $9,600 $18,700 $3,000 $20,250 $6,300 $15,900 Operating cash flows