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Difend Cleaners has been considering the purchase of an industrial dry - cleaning machine. The existing machine is operable for three more years and wil

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Difend Cleaners has been considering the purchase of an industrial dry - cleaning machine. The existing machine is operable for three more years and wil have a zero disposal price. If the machine is disposed now, it may be sold for $100,000. The new machirne will cost $350,000 and an additional cash investment in working capital of $120,000 will be required. The new machine will reduce the average amount of time required to wash clothing and will decrease labor costs. The investment is expected to net $150,000 in additional cash inflows during the first year of acquisition and $340,000 each additional year of use. The new machine has a three - year Ife, and zero disposal value. These cash fows will generally occur throughout the year and are recognized at the ond of each year. Incorne taxes are not considered in this problem. The working capital investment will not be recovered at the end of the assel's life. What is the net present value of the investment, assuming the required rate of return is 6% ? Would the compary want to purchase the new machine? A. $359,650, yes B. 5($285,471); no C. $($359,650); no D. $285,471; yes

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