2) Difend Cleaners has been considering the purchase of an industrial dry-cleaning machine. The 2) existing machine is operable for three more years and will have a zero disposal price. If the machine is disposed now, it may be sold for $100,000. The new machine will cost $430,000 and an additional cash investment in working capital of $100,000 will be required. The ne machine will reduce the average amount of time required to wash clothing and will decrease labor costs. The investment is expected to net $140,000 in additional cash inflows during th first year of acquisition and $270,000 each additional year of use. The new machine has a three-year life, and zero d year and are recognized at the end of each year. Income taxes are not considered in this problem. The working capital investment will not be recovered at the end of the asset's life isposal value. These cash flows will generally occur throughout the What is the net present value of the investment, assuming the required rate of return is 9%? Would the company want to purchase the new machine? A) $208,440; no B) S(134,160); no C) s(208,440); yes D) $134,160; yes 3) If the net present value for a project is positive, which of the following is true? 3) A) its internal rate of return is more than its cost of capital B) its internal rate of return is less than its cost of capital C) its expected rate of return is below the required rate of return D) the project should be accepted because its expected rate of return is greater than the cost of capital 4) Forge Company wants to purchase a new cutting machine for its sewing plant. The investment 4) is expected to generate annual cash inflows of $140,000. The required rate of return is 10% and the current machine is expected to last for seven years. Of the following choices, which is the dollar amount the company would be willing to spend for the machine, assuming its life is also seven years? Income taxes are not considered A) $702,660 B) $1,328,180 C) $882,000 D) $681,520