Almendarez Corporation is considering the purchase of a machine that would cost $220,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $21,500. By reducing labor and other operating costs, the machine would provide annual cost savings of $46,000. The company requires a minimum pretax return of 10% on all investment projects. (Ignore income taxes.)

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.

The net present value of the proposed project is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

Multiple Choice

• $16,464

• $(7,544)

• $(56,000)

• $(22,891)

EXHIBIT 128-2 Present Value of an Annuity of $1 in Arrears: 1 - Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 2 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 1605 1585 1566 1547 1528 1509 1492 1474 1457 1440 3 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106 2.074 2.042 2.011 1.981 1952 4 3.546 3.465 3.387 3.312 3240 3.170 3.102 3037 2.974 2.914 2855 2.798 2743 2690 2639 2 589 2540 2.494 2.448 2.404 2362 5 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.1993.127 3.058 2.991 2.926 2.864 2.803 2.745 2.689 6 5242 5076 4.917 4.767 4623 4486 4355 4231 4111 3.998 3.889 3784 3685 3.589 3.498 3410 3326 3.245 3167 3.092 3020 2951 7 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 8 6733 6.463 6.210 5.971 57475.535 5335 5146 4.968 4.799 4639 4.487 4344 4.207 4078 3.954 3837 3.726 3619 3518 3.421 3329 9 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 3.673 3.566 3.463 10 8.111 7722 7360 7024 6.710 6.418 6145 5.889 5650 5.426 5216 5019 4833 4.659 4.494 43394192 4.054 3.923 3799 3.682 3571 11 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.327 4.177 4.035 3.902 3.776 3.656 9.385 8.863 8.384 7.943 7536 71616.814 6.492 6.194 5.918 5.660 5.421 5.197 4.988 4.793 4.611 4.439 4.278 4.127 3.985 13 9.986 9.394 8.853 8.358 7.904 7.487 7103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 4.053 3.912 3.780 14 10.563 9.899 9.295 8.745 8.244 7.786 7367 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4.6114.432 4.265 4.108 3.962 3.824 15 11.118 10.380 9712 9.108 8.559 8.061 7606 7191 6.811 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675 4.489 4.315 4.153 4.001 3.859 16 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4.730 4.536 4357 4.189 4.033 3.887 17 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.5497.120 6.729 6.373 6.047 5.749 5.475 5.222 4.990 4.775 4.576 4.391 4.219 4.059 3.910 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5.033 4.812 4.608 4.419 4.243 4.080 3.928 19 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7839 7366 6.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 4.635 4.442 4.263 4.097 3.942 20 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.4697.025 6.623 6.259 5.929 5.628 5.353 5.101 4.870 4.657 4.460 4.279 4.110 3.954 21 14.029 12.821 11.764 10.836 10.017 9.292 8649 8.075 7562 7102 6.687 6.312 5.973 5.665 5.384 5127 4.891 4.675 4.476 4.292 4.121 3.963 22 14.451 13.163 12.042 11.061 10.201 9.442 8.772 8.176 7.645 7.170 6.743 6.359 6.011 5.696 5.410 5.149 4.909 4.690 4.488 4.302 4.130 3.970 14.857 13.489 12.303 11.272 10.371 9.580 8883 8.266 7718 7230 6.792 6 399 6.044 5723 5.432 5.167 4.925 4.703 4.499 4.311 4137 3.976 24 15.247 13.799 12.550 11.469 10.529 9.707 8.985 8.348 7784 7.283 6.835 6.434 6.073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 25 15622 14.094 1278311654 10.675 9.823 9.077 8.422 7843 7330 6873 6.464 6.097 5766 5.467 5195 4948 4721 4514 4.323 4147 3985 15.983 14.375 13.003 11.826 10.810 9.929 9.161 8.488 7.896 7.372 6.906 6.491 6.118 5.783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988 27 16.330 14643 13 211 11.987 10.935 10.027 9.237 8.548 79437409 6.935 6.514 6136 5798 5.492 5215 4.964 4734 4.524 4.332 4154 3.990 28 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 3.992 29 16.984 15.141 13.591 12 278 11.158 10.198 9370 8.650 8022 7470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4.531 4.337 4159 3.994 30 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.534 4.339 4.160 3.995 40 19.793 17159 15.046 13.332 11.925 10.757 9779 8.951 8 244 7634 7105 6642 6.233 5.871 5548 5.258 4.997 4.760 4544 4.347 4166 3.999 26 EXHIBIT 12B-1 Present Value of $1; 17 Perious 4% 5% 6% 7% 8% % 0% 1% 2% 3% 4% 15% 6% 7% 8% 9% 20% 21% 22% 23% 24% 25% 1 0962 0952 0943 0935 0926 097 0909 0901 0.893 0885 087 0.870 0862 0855 0.847 0.840 0833 0826 0.820 083 0806 0.800 1 0925 0907 0890 0873 0.857 0842 0826 0.812 0.797 0.783 0.769 0.56 0.743 0731 0.718 0.706 0694 0.683 0.672 0661 0650 0.640 3 0889 0864 0840 0816 094 02 0751 03 07/2 0693 065 0658 0641 0624 0609 0593 0579 0564 0551 0537 0524 0.512 4 0.855 0.823 0792 0.763 0.735 0708 0.683 0659 0.636 0613 0.592 0572 0552 0534 0.516 0.499 0482 0467 0451 0437 0423 0.410 5 0822 0784 0747 07 0681 0650 0621 0593 0567 0543 0519 00497 0476 0456 0437 0419 0402 0386 0370 0355 0341 0328 6 0.790 0.746 0705 0666 0.630 0596 0564 0535 0.507 0480 0.456 0432 0410 0.390 0.370 0352 0.335 0.319 0.303 0.289 0275 0.262 1 0760 0711 0665 0623 058.3 0547 0513 0482 0452 0425 0400 0376 0354 033 0314 0296 0279 0263 0249 0235 0222 0210 8 0.731 0.67 0627 0.582 0.540 0.502 0467 0.434 0.404 0376 0351 0.327 0.305 0285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.168 9 0703 0645 0592 0.544 0500 1450 0424 03910361 0333 0308 0284 026.0243 0225 0209 01 0284 0263 0243 0225 0209 0194 0180 0160155 0144 0LM 10 0.676 0.614 0558 0.508 0.463 0422 0386 0.352 0322 0.295 0.270 0.247 0227 0.208 0191 0.176 0.162 0.149 0.137 0126 016 0107 1 0650 0.585 0527 0475 0429 0.388 0350 0.37 0287 0261 0237 0215 0195 0178 0162 0.148 0135 0123 012 0103 0094 0.086 2 0625 0.57 0497 044 0.397 0356 0319 0286 0.257 0231 0208 0.187 0168 0152 0137 0.124 012 0102 0.092 0083 0076 0.069 3 0601 0530 0469 0415 0.368 0326 0290 0258 0229 0.204 0182 0163 0.145 0130 0116 0104 0093 0.084 0075 0068 0061 0.055 4 0577 0.505 0442 0388 0340 0299 0263 0.232 0.205 018 0160 0.141 0125 0 0.099 0.088 0078 0069 0.062 0055 0049 0.044 5 0.555 0481 0. 47 0.362 0.35 0275 0.23 0.209 0183 0160 0140 0.123 2108 0095 0.084 0074 0065 0.057 0.051 0045 0040 0.035 6 0534 0458 0394 0339 0292 0252 0218 0188 0.163 041 0123 0107 0093 0081 001 0062 0054 0047 0.042 0036 0032 0028 7 0 513 0436 0371 0.37 0.270 0.231 0198 0.170 0.146 0125 0.108 0.093 0.080 0.069 0.060 0.052 0045 0.039 0.034 0.030 0026 0.023 8 0494 0416 0350 0296 0.250 022 0180 053 0130 011 0095 0081 0069 0059 0051 0044 0038 0032 0028 0024 0021 0018 0475 0396 0331 027 0232 0.194 0164 0138 0.116 0.098 0.083 0070 1060 0.051 0.043 007 0.031 0027 0023 0.020 007 0.014 200456 037 0312 0258 0215 0178 049 024 0104 0087 008 0061 0051 0043 0037 0031 0026 0022 0019 0016 0014 002 21 0.439 0.359 0294 0.242 0.199 0.164 085 0.12 0.093 007 0.064 0.053 0.044 0.037 0.031 0.026 0022 0.018 0.05 0.013 0.011 0.009 22 0422 0342 0278 0226 20184 0150 023 0101 0083 0068 0056 0.046 0038 0032 0026 0022 0018 0015 003 0011 0009 0007 23 0.406 0326 0.262 0.21 0.170 0.138 012 0.091 0.074 0.060 0.049 0.040 0033 0027 0.022 0.018 0.015 0.012 0.010 0009 0.007 0.006 4 0.390 0310 0247 0197 0158 0.126 0102 0.082 0066 0053 0043 0.0.35 0028 0023 0019 0015 0013 0010 0.008 0007 0006 0005 25 0.375 0.295 0233 0.184 0.146 0.16 0.092 0.074 0.059 0.047 0.038 0.030 0024 0.020 0.06 0.013 0.010 0.009 0.007 0.006 0.005 0.004 26 0.361 0281 0220 0172 0135 0106 0084 0.066 0.053 0042 0033 0.025 0021 007 0014 0.01 0009 0007 0.006 0.005 0004 0.003 | 0.347 0.268 0207 0161 0.125 0098 0.076 0.060 0.047 0037 0.029 0.023 0.018 0014 0.01 0.009 0007 0.006 0.005 0.004 0.003 0.002 28 0333 0255 0196 0150 016 0090 0069 0054 0.042 0033 0.026 0.020 0015 0012 0010 0.008 0006 0005 0004 2003 0002 0.002 29 0321 0243 0185 0141 0107 0.082 0063 0.048 0.037 0029 0.022 0.07 0014 0011 0.008 0.006 0005 0.004 0.003 0002 0002 0.002 30 0.308 0.231 0174 0131 0.09 0075 0057 0044 0.033 0026 0.020 0015 2012 0009 0.007 0.005 0.004 0.003 0.003 0002 0002 0.001 40 0208 0142 0097 0.067 0.046 0032 0022 0.05 0.011 0008 0005 0.004 0003 0002 0001 0.001 0001 0000 0000 0000 0000 0.000