32 Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investment of $14,800 and will produce cash flows as follows: End of Year 10 points 1 Investment A B $9, 200 0 9,200 0 9, 200 27,600 2 3 X 03:39:41 The present value factors of $1 each year at 15% are: eBook 2 0.8696 0.7561 0.6575 Ask 3 The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment B is: Multiple Choice O $8,416. O $12,800. O $45,747. $(18,147). O 33 A company is considering the purchase of new equipment for $69,000. The projected annual net cash flows are $27,800. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 9% return on investment. The present value of an annuity of $1 for various periods follows: Period 10 points 1 Present value of an annuity of $1 at 98 0.9174 1.7591 2.5313 3 03:39:37 What is the net present value of this machine assuming all cash flows occur at year-end? eBook Multiple Choice Ask $1,370 $67,839 a $3,800 O O $23,000 $26,800 O 34 A company is planning to purchase a machine that will cost $59,400 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine? $ 141,000 10 points X 03:39:32 Sales Costs: Manufacturing Depreciation on machine Selling and administrative expenses Income before taxes Income tax (30%) Net income $69,000 9,900 49,000 (127,900) $ 13,100 (3,930) $ 9,170 eBook Ask Multiple Choice O 6.00 years. O 3.11 years. O 6.48 years. O 1.89 year. O 12.96 years