Assume that a company is considering buying a new piece of equipment for $250,000 that would have a useful life of five years and a salvage value of $32,000. The equipment would generate the following estimated annual revenues and expenses:

Revenues		$ 120,000
Less operating expenses:
Commissions	$ 15,000
Insurance	5,000
Depreciation	43,600
Maintenance	30,000	93,600
Net operating income		$ 26,400

Click here to viewExhibit 14B-1andExhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Assuming a discount rate of 17%, what is the net present value of this investment?

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Multiple Choice

• $(11,478)
• $(150,954)
• $(128,966)
• $40,578