How do I figure out NPV if I purchased a dryer for $6000, sell the old one for $2,000. New dryer will last for appx 6 yeas saving me $1,500 on a yearly expense.
The opportunity cost of capital is 16% and the tax rate is 40%, how do I figure out the NPV?

bhet

.................................PV factror..........cash flow..............PV
purchased dryer.........1.0000...............(6000)......... .......(6000)
sold dryer..................1.0000................2000. .................2000
yearly saving.............3.6847.................1500.... ..............5527
net presnet value............................................. ..............1527.05

morgaine300

bhet, please do not just work people's homework problems for them. Not only are you doing work that they are responsible for, but just having answers doesn't usually help the person to understand how or why it was done so that they can apply to their other problems. (Please read the red announcement at the top of this forum.)

Your solution also does not take the tax savings on the reduced expenses into account.