Butler Corporation is considering the purchase of new equipment costing $33,000. The projected annual after-tax net income from the equipment is $1,300, after deducting $11,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 11% return on its investments. The present value of an annuity of 1 for different periods follows:

Period 11 Percent

1 .9009

2 0.7125

3 2.4437

4 3.1024

Choices

$(2,942). $3,900. $30,058. $33,000. $26,881.