1. You are deciding whether or not to upgrade some of your firm's equipment. The current gear produces $690.41 in profit per year per unit, and the new gear is expected to produce $791.72 in profit per year per unit. The upgrade would cost $4260 per unit. If the discount rate is 9.7% and the equipment is expected to operate indefinitely, what is the net present value of upgrading one unit of equipment? Round to the nearest penny.

2.

1. Below is a table of expected cash flows for a potential project. Select all of the capital budgeting rules that tell you to accept the project.

   Year	Cash Flow
   0	-1200
   1	150
   2	475
   3	650
   4	475

   		IRR, discount rate of 12%
   		IRR, discount rate of 15%
   		2 year Payback rule
   		NPV, discount rate of 12%