Triple Crossing Brewing is considering installing a new cooler (equipment) in order to increase the volume and variety of beverages they can offer. The new cooler will cost $24,000. It is expected to last 7 years but only if the cooler is overhauled (REPAIRED) at a cost of $4,000 at the end of year 4. The new cooler is expected to have a $2,000 salvage value at the end of 7 years. The new cooler is expected to generate additional revenues of $15,000 per year with an increase in expenses of $9,000 per year. Triple Crossings discount rate is 12%. What is the net present value of this investment opportunity? Should they invest in the cooler?

Hint: determine the PV of each item. Be careful if the item is an annuity (annual) or one time only event.

PV of an annuity of $1 PV of $1

Time period	10%	12%	14%		Time period	10%	12%	14%
1	0.909	0.893	0.877		1	0.909	0.893	0.877
2	1.736	1.690	1.647		2	0.826	0.797	0.769
3	2.487	2.402	2.322		3	0.751	0.712	0.675
4	3.170	3.037	2.914		4	0.683	0.636	0.592
5	3.791	3.605	3.433		5	0.621	0.567	0.519
6	4.355	4.111	3.889		6	0.564	0.507	0.456
7	4.868	4.564	4.288		7	0.513	0.452	0.400
8	5.335	4.968	4.639		8	0.467	0.404	0.351