Omni Motors is considering buying new equipment with an initial investment value of $30,000. The equipment has a 5-year life and no residual value at the end of the 5 years. There are many uncertainties in the industry and, therefore, the company has estimated expected cash inflows for three different scenarios: pessimistic, most likely, and optimistic. The following table lists the company’s cost of capital is 10.5%, and the expected cash inflows. Calculate the NPV for each given scenario. Should Omni make this investment?

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Year 123 2 45 Expected cash inflows Most likely Pessimistic $4,500 3,500 5,620 3,680 2,950 $6,500 5,770 7,850 7,240 4,260 Optimistic $ 8,350 7,630 12,520 11,410 9,110