8. The following data on a proposed investment project have been provided:

Cost of equipment	$50,000
Working capital required	$30,000
Salvage value of equipment	$0
Annual cash inflows from the project	$20,000
Required rate of return	20%
Life of the project	8 years

The working capital would be released for use elsewhere at the end of the project. The net present value of the project is closest to:

A $3,730

B $0

C $32,450

D $88,370

9. Riveros, Inc., is considering the purchase of a machine that would cost $120,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $29,000. The machine would reduce labor and other costs by $25,000 per year. Additional working capital of $9,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 18% on all investment projects. The net present value of the proposed project is closest to:

A ($18,050)

B ($63,683)

C ($10,336)

D ($16,942)

10.The following data pertain to an investment proposal:

Cost of the investment	$30,000
Annual cost savings	$9,000
Estimated salvage value	$4,000
Life of the project	5 years
Discount rate	12%

The net present value of the proposed investment is closest to:

A $4,713

B $2,445

C $2,268

D $19,000

14. Pro-Mate, Inc. is a producer of athletic equipment. The company is considering the purchase of a machine to produce baseball bats. The machine will cost $60,000 and have a 10-year useful life. The following annual revenues and expenses are projected:

Sales		$40,000
Less expenses:
Out-of-pocket production costs	$15,000
Selling expenses	9,000
Depreciation	6,000	30,000
Net operating income		$10,000

The machine will have no salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the new machine is about:

A 6.0 years

B 1.5 years

C 5.4 years

D 3.75 years