The Management of Penfold Corporation Is Considering the Purchase of a Machine

question 117

Multiple Choice

The management of Penfold Corporation is considering the purchase of a machine that would cost $440,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $102,000 per year. The company requires a minimum pretax return of 16% on all investment projects. The net present value of the proposed project is closest to (Ignore income taxes.) : Use Exhibit 7B-1 and Exhibit 7B-2 to determine the appropriate discount factor(s) using the tables provided.

• A) $(28,022)
• B) $96,949
• C) $(79,196)
• D) $274,000

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The ability of an individual to use and understand two languages proficiently.

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