Investment timing decision

TIME UNTI COST BENEFIT NPV = BEFIT - COST NPV TODAY =

PURCHASE $ $ NPV * PVIF pvif = (1.1)^-n
0 4,000.00 4470 470.00 470.000
1 3,400.00 4470 1,070.00 972.727
2 2,720.00 4470 1,750.00 1,446.281
3 2,176.00 4470 2,294.00 1,723.516
4 1,740.80 4470 2,729.20 1,864.080
5 1,392.64 4470 3,077.36 1,910.798 <==== Max NPV today, we should until 5
6 1,114.11 4470 3,355.89 1,894.311
7 891.29 4470 3,578.71 1,836.444
8 713.03 4470 3,756.97 1,752.653

BENEFIT
Scanner will provide a benefit of $ 900 per year for 8 years
PV of benefit = PMT * PVIFA = 900 * {1 - (1+0.12)^-8} / 0.12
= 900 * 4.9676
=4,470
ax NPV today, we should until 5th year