You are reviewing a proposal to purchase new equipment. The upfront cost of equipment is $225,000. If purchased, annual cash flows would increase by $88,000 for the first 3 years and $75,000 a year for years 4 and 5. At the end of five years, the equipment will be sold for $14,500, increasing the annual cash flow for year five to $89,500. If the companys weighted average cost of capital is 14.5%, calculate the net present value for the equipment purchase.

Select one:

a.

$66,925

b.

$66,374

c.

$66,890

d.

$66,991

e.

$66,715