You run a coffee shop, where you currently sell 200 coffees per year at $4

each, and 100 pastries per year at $3 each. You also currently pay $200

per year to rent the building space, and you pay a barista $100 per year to

serve the coffee and pastries.

You just paid a consultant $50 to assess ways in which you can increase

revenue. Based on his advice, you are thinking of purchasing a sign

spinner, currently priced at $125, to direct nearby foot traffic to your shop.

You will also need to hire someone to operate the sign spinner, at an

annual salary of $75 per year.

Based on market surveys, you expect that the sign spinner will enable you

to sell 150 more coffees and 50 more pastries per year. The sign-spinning

machine has a useful life of five years, and cannot be re-sold. Suppose

you book the machine as an asset upon purchase, and declare an annual

depreciation expense of $25 per year throughout its useful life. Your

relevant marginal tax rate is 30%.

Assuming the relevant OCC is 10%, what is the NPV of this investment (i.e.,

investing in the sign spinner)?

Show all calculations next to cells and round all interim work to at least 4 decimal places.