Norton Company is considering a closed-loop geothermal heat pump to replace its existing heating system. The project will require an initial investment of $750,000 and will return $200,000 each year for five years.
(a) If taxes are ignored and the required rate of return is 9%, what is the project's net present value?
(b) Based on this analysis, should Norton Company proceed with the project?Below is a table for the present value of $1 at compound interest. 
Below is a table for the present value of an annuity of $1 at compound interest. 
Definitions:
Workload
The amount of work assigned to or expected from a person or group within a given time frame.
Stress Test
A medical test that assesses how a person's heart functions during physical activity or under pharmacological stimulation.
Magnifying Lens
An optical lens or combination of lenses used to enlarge the appearance of objects.
Bright Light
Intense, vivid light that is significantly brighter than the surrounding environment, often used in therapy to treat certain mood disorders.
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