The Following Present Value Factors Are Provided for Use in This

question 17

Multiple Choice

The following present value factors are provided for use in this problem. Norman Co. wants to purchase a machine for $40,000, but needs to earn an 8% return. The expected year-end net cash flows are $12,000 in each of the first three years, and $16,000 in the fourth year. What is the machine's net present value (round to the nearest whole dollar) ?

• A) $(9,075).
• B) $2,685.
• C) $42,685.
• D) $(28,240).
• E) $52,000.

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Definitions:

Antiseptic Solution

A solution used to prevent the growth of microorganisms on living tissue or skin, often utilized to clean wounds.

Dressing

A sterile pad or compress applied to a wound to promote healing and protect from further harm.

Intravenous Catheter

A tube inserted into a vein to provide venous access for the administration of fluids, medications, and nutrients.

Peripheral Intravenous Catheter

A device inserted into a peripheral vein, usually in the hand or arm, to administer medications or fluids.