14-15

Maxim has already spent $30,300 to manufacture a hamster food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand that can be sold for $93,840. Alternatively, Maxim can process it further into a different product, Premium Green, at an additional cost of $6,300. If Maxim processes further, the Premium Green can be sold for $102,200. The incremental income to process further is: The following present value factors are provided for use in this problem, Periods 1 2 Present Value of $1 at 8% @.9259 0.8573 0.7938 0.7350 Present Value of an Annuity of $1 at 8% 0.9259 1.7833 2.5771 3.3121 3 4 Cliff Company wants to purchase an asset for $58,000, but needs to earn a return of 8%. The expected year-end net cash flows are $22,000 in each of the first three years, and $26,000 in the fourth year. What is the machine's net present value (round to the nearest whole dollar)