Alberta Ltd. is considering the purchase of new machinery which costs$147,800. The machine is expected to save$42,300 in operating costs annually for the next 7 years. By how much can the annual cost savings fall(to the nearest hundreddollars) and still provide a16% return? Ignore income taxes.

A.

$42,300

B.

$5,700

C.

$0

D.

$36,600

E.

$21,200