16. Tony's Wrecker Service is evaluating a capital investment opportunity. This project would require an initial investment of $38,000 to purchase equipment. The equipment will have a salvage value at the end of its life of $3,000. The useful life of the equipment is 5 years. The new project is expected to generate additional net cash inflows of $12,000 per year for each of the five years. Tony's required rate of return is 14%. The net present value of this project is closest to:

Appendix 9-1 (Present value of $1 received in n periods):

	12%	13%	14%	16%	18%
1	0.8929	0.8850	0.8772	0.8621	0.8475
2	0.7972	0.7831	0.7695	0.7432	0.7182
3	0.7118	0.6931	0.6750	0.6407	0.6086
4	0.6355	0.6133	0.5921	0.5523	0.5158
5	0.5674	0.5428	0.5194	0.4761	0.4371

Appendix 9-2 (Present value of an annuity of $1 per period):

	12%	13%	14%	16%	18%
1	0.8929	0.8850	0.8772	0.8621	0.8475
2	1.6901	1.6681	1.6467	1.6052	1.5656
3	2.4018	2.3612	2.3216	2.2459	2.1743
4	3.0373	2.9745	2.9137	2.7982	2.6901
5	3.6048	3.5172	3.4331	3.2743	3.1272

Group of answer choices

$3,196

$4,753

($1,994)

$28,386