2.Ray Manufacturing Company is considering the purchase of a new machine. The machine would cost the company $10,000, would have a 5-year life and $1,000 residual value, and would be depreciated by the straight-line method over its useful life. The machine would save the company $2,500 each year in direct labor costs, but would increase factory overhead costs by $400 annually. If the net present value method is used to evaluate the proposed investment in the machine, which of the following would not be discounted?

a.	The acquisition cost of the machine.
b.	The savings in direct labor costs.
c.	The increased factory overhead costs.
d.	The residual value of the machine.