Charlie Corporation is considering buying a new donut maker. This machine will replace an old donut maker that still has a useful life of 6 years. The new machine will cost $3,690 a year to operate, as opposed to the old machine, which costs $4,025 per year to operate. Also, because of increased capacity, an additional 20,900 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $7,900 and the new machine costs $30,900. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.):

Multiple Choice

• $335

• $2,090

• $5,810

• $2,425

A project requires an initial investment of $76,000 and has a project profitability index of 0.310. The present value of the future cash inflows from this investment is:

Multiple Choice

• $52,440

• $99,560

• $23,560

• $76,000