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Sunny Days Corporation is deciding whether to automate one phase of its production process. The...

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Accounting

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Sunny Days Corporation is deciding whether to automate one phase of its production process. The equipment has a six-year life and will cost $310.000. Projected net cash inflows from the equipment are as follows: Year 1 $150.000 Year 2 $140,000 Year 3 $130.000 Year 4 $110.000 Year 5 $67.000 Year 6 $83.000 Sunny Days Corporation's hurdle rate is 14%. If Sunny Days Corporation decides to refurbish the equipment at a cost of $40,000 at the end of year 6, it could be used for one more year and would have a $10,000 residual value at the end of year 7. Assume the cash inflow in year 7 is $60,000. What is the NPV of just the refurbishment? O A. $(5,760) O B. $9.760 OC. $15.400 OD. $28.000

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