n, only 60 percent of this loss ($96,000) is included in the net present value analysis. The company will also sustain a loss on its existing supply of GHL stock. The company's loss will be $300 per ton on the 150 tons remaining for a total loss of $45,000. Only 60 percent of this loss ($27,000) is included in the net present value analysis. The company will also be required to pay severance pay for two employees in the total among of $10,000 per year for five years. Only 60 percent of this amount ($6,000 per year) is included in the net present value analysis. Lastly, the company will save $27,500 per year in rental costs. Only 60 percent of this amount ($16,500 per year) is included in the net present value analysis. The net present value analysis for alternative number one is as follows:
Period Amount ($) PVIF (10%) Present Value ($)
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