X Company is planning to drop a department that has shown a $11,000 loss in each of the last 3 years. If the department is dropped, three things will happen: 1) the annual loss will be avoided, 2) some equipment will be sold immediately for $17,000, 3) sales of another product will be increased, contributing $1,000 to annual profits. Assuming a 7 year time horizon and a discount rate of 5%, what is the net present value of dropping the department?

Can someone explain the answer.

Thanks for help!!