1. The cost of the machine is $200,000. It has a useful life of 5 years. It saves us $50,000 annually in labor costs. We estimate a salvage value of $10,000. Our cost of capital (discount rate) is 7%. Based on these facts, use your BA II Plus calculator to calculate the machines NPV (Net Present Value). On this problem, use ANNUAL COMPOUNDING (Thus, set your P/Y = 1). Round only your answer (the NPV of the machine) to the nearest dollar amount. Do not round any other amount in the problem.

	A. $5,010
	B.	$12,140
	C,	$60,000
	D.	$156,263
	E.	$205,010
	F.	$212,140

2. The cost of the machine is $200,000. It has a useful life of 5 years. It saves us $50,000 annually in labor costs. We estimate a salvage value of $10,000. Our cost of capital (discount rate) is 7%. Based on these facts, use your BA II Plus calculator to calculate the machines IRR (internal rate of return). On this problem, use ANNUAL COMPOUNDING (Thus, set your P/Y = 1). Round only your answer (the IRR of the machine) to a percent PLUS two decimal places. Do not round any other amount in the problem.

	A.	7.93%
		B. 9.18%
		C. 18.37%
		D. 21.62%
		E. Cannot be determined with the data shown.

3. The cost of a particular machine is $150,000. It has a useful life of 5 years. It saves us $30,000 annually in labor costs. We estimate a salvage value of $8,000. Our cost of capital (discount rate) is 8%. Based on these facts, use your BA II Plus calculator to calculate the machines NPV (Net Present Value). On this problem, use ANNUAL COMPOUNDING (Thus, set your P/Y = 1). Round only your answer (the NPV of the machine) to the nearest dollar amount. Do not round any other amount in the problem.

A. $(21,290) - a negative number

	B.	$(24,774) a negative number
		C. $8,000
		D. $25,998
		E. $125,226
F.		$175,998