Clairmont Corporation is considering the purchase of a machine that would cost $150,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $39,000. The company requires a minimum pretax return of 13% on all investment projects. (Ignore income taxes in this problem.)

Click here- http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-1.JPG to view Exhibit 11B-1 and- http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-2.JPG Exhibit 11B-2, to determine the appropriate discount factor(s) using tables.

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.)

$(3,063)

$11,983

$45,000

$(18,410)