A company is considering the purchase of new equipment for $480,000. The projected after-tax net income is $80,000 per year, after deducting $160,000 of annual depreciation expense. The equipment has a useful life of 3 years and no salvage value. Management of the company requires a 12% return on investment. The present values of an annuity of $1 for various periods follows:

Period Present Value of an Annuity of $1 at 12%

1......0.8929

2......1.6901

3....2.4018

What is the net present value (NPV) of this equipment assuming cash flows occur at year-end?

a. $96,432.

b. $576,432.

c. $716,352.

d. $ (95,712).

e. $(287,856).