Management is trying to decide whether or not to build a new factory. They believe sales are

increasing for their products. They have estimated revenues of $$95,000$ in year one, $$70,000$ in

years two through ten. In $10$ years the factory is obsolete.

They estimate expenses annually to operate the factory after year $1$ would be $$35,000.$

The cost of the new factory is $$350,000.$ The payments required are $$90,000$ immediately with the

remainder due through annual payments.

The company has hurdle rate of $6\%.$

Use these tables ${?}^{-1}$ to solve the problems.

a$.$ What is the net present value of this new factory? $($Note that if your answer is negative then

you need to place parentheses around it$)$

$

b$.$ What would the net present value be if the factory only produces goods for $9$ years?