1). What is the present value of a 10-year, $30,000 after-tax annual cash flow stream at 10%? Assume the cash flows occur at the end of each period.

A. $50,000

B. $92,175

C. $80,000

D. $184,350

2). A company is considering buying a new machine for $40,000. The machine is expected to save the company $16,000 for each of the next 5 years. The cost of the machine will be depreciated evenly over the next 5 years, with no salvage value. Compute the machine's simple rate of return. Ignore income taxes.

A. 30%

B. 10%

C. 15%

D. 20%

3). RNX Inc. purchased a machine for $40,000 which will save the company approximately $16,000 in even cash flows per year. What is the machine's payback period?

A. 5 yrs

B. 3 yrs

C. 2.5 yrs

D. 3.6 yrs