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Poe Company is considering the purchase of new equipment costing $80,500. The projected net cash flows are $35,500 for the first two years and $30,500 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of $1 and present value of an annuity of $1 for different periods is presented below. Compute the net present value of the machine.

Periods	Present Value of $1 at 10%			Present Value of an Annuity of $1 at 10%
1		0.9091			0.9091
2		0.8264			1.7355
3		0.7513			2.4869
4		0.6830			3.1699

Multiple Choice

• $(16,816).

• $(5,801).

• $16,816.

• $5,801.

• $24,859.