(Present value tables are needed.) Mulheim Corporation is deciding whether to automate one phase of its production process. The equipment has a six-year life and will cost $410,000. Projected net cash inflows from the equipment are as follows: 
Mulheim Corporation's hurdle rate is 12%.
If Mulheim Corporation decides to refurbish the equipment at a cost of $60,000 at the end of year 6, it could be used for one more year and would have a $30,000 residual value at the end of year 7. Assume the cash inflow in year 7 is $65,000. What is the NPV of just the refurbishment?
Definitions:
Interest Saved
The amount of money that is not paid as interest due to paying off debt earlier or negotiating better rates.
Savings Account
A deposit account held at a financial institution that provides principal security and interest earnings.
Rate of Return
An indicator of the profit or loss on an investment, shown as a percentage of the investment's original value, for a defined timeframe.
Initial Deposit
The first amount of money placed into an account or investment.
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