Use the Following to Answer Questions

question 24

Multiple Choice

Use the following to answer questions
Union Company is contemplating the acquisition of a new computer that will cost the company $19,500. The computer is expected to last 4 years, after which time it will be discarded. Union's cost of capital is 10%, and use of the computer is expected to reduce the company's annual cash operating costs by the following amounts:

-Ignoring income taxes,Union should:

• A)not purchase the equipment since the net-present-value is negative
• B)not purchase the equipment since the net-present-value is positive
• C)purchase the equipment since the net-present-value is negative
• D)purchase the equipment since the net-present-value is positive