Question - The Whispering Winds Company is planning to purchase $458,000 of equipment with an estimated 7-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment:
Year Projected Cash Flows
1 $215,000
2 136,000
3 105,000
4 58,400
5 61,900
6 43,600
7 46,600
Total $666,500
Calculate the net present value of the proposed equipment purchase. Whispering Winds uses a 13% discount rate.