(Net present value​ calculation) Carson Trucking is considering whether to expand its regional service center in​ Mohab, UT. The expansion requires the expenditure of $11,000,000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to ​$4,000,000 per year for each of the next 6 years. In year 6 the firm will also get back a cash flow equal to the salvage value of the​ equipment, which is valued at $0.9 million. ​Thus, in year 6 the investment cash inflow totals $4,900,000. Calculate the​ project's NPV using a discount rate of 8 percent. If the discount rate is 8 ​percent, what is the​ project's NPV ​. ​(Round to the nearest​ dollar.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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​(Net present value​ calculation) Carson Trucking is considering whether to expand its regional service center in​ Mohab, UT. The expansion requires the expenditure of $11,000,000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to
​$4,000,000 per year for each of the next 6 years. In year 6 the firm will also get back a cash flow equal to the salvage value of the​ equipment, which is valued at $0.9 million. ​Thus, in year 6 the investment cash inflow totals $4,900,000.

Calculate the​ project's NPV using a discount rate of 8 percent.
If the discount rate is 8 ​percent, what is the​ project's NPV
​.
​(Round to the nearest​ dollar.)
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