A project will produce an operating cash flow of $358,000 a year for four years. The initial cash outlay for equipment will be $785,000. The net aftertax salvage value of $42,000 will be received at the end of the project. The project requires $78,000 of net working capital that will be fully recovered when the project ends. What is the net present value of the project if the required rate of return is 14 percent?

		$237,613
		$251,159
		$274,300
		$290,184
		$309,756

Assume a machine costs $540,000 and lasts eight years before it is replaced. The operating cost is $37,500 a year. Ignore taxes. What is the equivalent annual cost if the required rate of return is 14 percent? (Hint: the EAC should account for both initial investment and annual operating costs)

		$125,516.07
		$138,247.15
		$153,907.81
		$166,470.92
		$178,503.40