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

$$28,000.$ The equipment would generate the following estimated annual revenues and expenses:

Revenues

$$120,000$

Less operating expenses:

Commissions

Insurance

$$15,000$

Depreciation

Maintenance

Net operating income

Click here to view Exhibit $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using the tables provided.

Assuming a discount rate of $14\%,$ what is the net present value of this investment?

Multiple Choice

$$4,842$

$$(157,267)$

$$(122,330)$