Answer:
The answer is given below;
Explanation:
Description 0 1 2
Equipment (40,000)
Depreciation
(40,000/10,000)*4,000 (16,000)
(40,000/10,000)*6,000 (24,000)
Savings 28,000 40,000
Salvage Value 15,000
Net Cash flows 12,000 31,000
PV factor 1/1.1 =.91 1/1.1^2=.83
Net present value
PV factor*net cash flows 10,920 25,730
(10,920+25,730) 36,650
Net present value (40,000)+36,650=(3,350)
