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# ​(Net present value​ calculation)  Carson Trucking is considering whether to expand its regional service center in​...

## Question

###### ​(Net present value​ calculation)  Carson Trucking is considering whether to expand its regional service center in​...

​(Net present value​ calculation)  Carson Trucking is considering whether to expand its regional service center in​ Mohab, UT. The expansion requires the expenditure of ​\$10 500 000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to ​\$3 500 000 per year for each of the next 7 years. In year 7 the firm will also get back a cash flow equal to the salvage value of the​ equipment, which is valued at ​\$1 million. ​ Thus, in year 7 the investment cash inflow totals ​\$4 500 000. Calculate the​ project's NPV using a discount rate of 8 percent.

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