ABS Corporation is considering an investment in new machinery and is gathering data about the purchase. The new machine costs $500,000 and will have delivery charges of $45,000 and installation charges of $25,000. The new machine will be depreciated over 5 years and the salvage value will not be considered in the depreciation calculation. The old machinery had an original cost of $200,000. The current book value of the old machinery is $15,000 and has a current market value of $25,000. The new machine is expected to produce marginal cash revenues of $325,000 and marginal cash expenses of $75,000 annually for each of the next 5 years. The new machine will be sold at the end of the 5-year project for $30,000, when it will be fully depreciated. ABS is subject to a 25% tax rate. ABS corporation has a weighted average cost of capital of 12%, but since this project is riskier than other projects, management has decided to adjust the required rate of return by 2%.

Calculate the net present value of the project.

Options; a) $205,736.10 b) ($185,637.30) c)$194,049.60 d)$285,283.10