• Current System: Usable for 2 more years with zero resale value.
• New System Cost: $500,000
• Additional Working Capital: $80,000
• Annual Cash Inflows: $150,000 in the first year, increasing by $25,000 each year for the next five years.
• Salvage Value: $20,000 at the end of the 6th year.
• Required Rate of Return: 9%
• Setup Cost: $20,000 in the first year.

Requirements:

1. Calculate the NPV of the investment.
2. Determine if the investment is beneficial.
3. Consider the salvage value of the new system.
4. Include additional working capital and setup costs.
5. Use a discount rate of 9%.