You are a small business owner and you have the
opportunity to expand your facility, which will increase your
production capacity over the next 5 years. The expansion will cost
$60,000 and additional equipment will cost another $20,000.
Additional profits after tax will
amount to $18,000 per year. Your cost of capital is 8%. Should you go
ahead with the expansion? Why or why not? HINT: Use NPV.