(Present Value Tables Are Needed

question 51

Multiple Choice

(Present value tables are needed.) Mulheim Corporation is deciding whether to automate one phase of its production process. The equipment has a six-year life and will cost $410,000. Projected net cash inflows from the equipment are as follows: Mulheim Corporation's hurdle rate is 12%. Assume the residual value is zero.
What is the net present value of the equipment?

• A)$(18,275)
• B)$3,046
• C)$20,000
• D)$18,275

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