Clairmont Corporation is considering the purchase of a machine that would cost $210,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $21,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $45,000. The company requires a minimum pretax return of 7% on all investment projects. (Ignore income taxes in this problem.)

Click here to viewExhibit 13B-1andExhibit 13B-2, to determine the appropriate discount factor(s) using table.

The net present value of the proposed project is closest to:(Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

$(10,527) $19,447 $15,000 $(25,874)

Dunay Corporation is considering investing $925,000 in a project. The life of the project would be 7 years. The project would require additional working capital of $42,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $194,000. The salvage value of the assets used in the project would be $52,000. The company uses a discount rate of 12%. (Ignore income taxes.)

Click here to viewExhibit 13B-1andExhibit 13B-2to determine the appropriate discount factor(s) using tables.

Required:

Compute the net present value of the project.(Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Net present value

$