Jet Dry Inc

Jet Dry Inc. is undergoing a sale/leaseback arrangement on a piece of its excavating equipment. The equipment is a class 38 (30%)asset, with a fair market value of $250,000 (which is lower than the original cost). The equipment currently generates $75,000 in annual pre-tax revenue. Jet Dry Inc.
will sell the equipment at FMV.
Under the leasing terms, the lease agreement will be for five years, with no residual value at the end of the term. The annual leasing cost will be $55,000 per year.
The UCC relating to this piece of equipment is estimated to be $150,000. Other assets will remain in the asset pool, and there is sufficient UCC in the class that recapture will not occur as a result of the sale.
The company is subject to a corporate tax rate of 27% and achieves a 12% after-tax rate of return. Required:
Calculate the net present value of the cash flow that will result from this sale-and-leaseback
arrangement. (Round all numbers to zero decimal places.)