The Following Present Value Factors Are Provided for Use in This

question 97

Multiple Choice

The following present value factors are provided for use in this problem. Cliff Co. wants to purchase a machine for $40,000, but needs to earn a return of 8%. 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?

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

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