A company is considering the purchase of new equipment for $105,000. The projected annual net cash flows are $41,000. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 8% return on investment. The present value of an annuity of $1 for various periods follows:

Period	Present value of an annuity of $1 at 8%
1	0.9259
2	1.7833
3	2.5771

What is the net present value of this machine assuming all cash flows occur at year-end?

Multiple Choice

• $35,000

• $40,000

• $103,084

• $5,000

• $661