Calculate the project net present value

ment FULL SCREEN PRINTER VERSION 1 BACK NEXT Problem 13.22A a-d (Part Level Submission) BioFarm Inc. wants to replace its current equipment with new high-tech equipment. The existing equipment was purchased 5 years ago at a cost of $125,000. At that time, the old equipment is $40,900. the equipment had an expected life of 10 years, with no expected salvage value. The equipment is being depreciated on a straight-line basis. Currently, the market value of The new equipment can be bought for $172,380, including installation. Over its 10-year life, it will reduce operating expenses from $190,100 to $150,000 for the first six years, and from $206,500 to $191,800 for the last four years. Net working capital requirements will also increase by $20,900 at the time of replacement. It is estimated that the company can sell the new equipment for $24,800 at the end of its life. Since the new equipment's cash flows are relatively certain, the project's cost of capital is set at 10%, compared with 15% for an average-risk project. The firm's maximum acceptable payback period is 5 years. Click here to view PV table. (a) Your answer is correct. Calculate the initial investment amount. Initial investment LA 152380 SHOW SOLUTION LINK TO TEXT LINK TO TEXT