Holdt Inc. produces and sells a single product. The selling price of the product is $110.00 per unit and its variable cost is $70 per unit. The fixed expense is $160,000 per month. The break-even sales (units) is:

		4,000
		5,500
		6,500
		2,500

The management of Indiana Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment:

Year	Income fromOperations	Net Cash Flow
1	$100,000	$180,000
2	60,000	120,000
3	30,000	100,000
4	10,000	90,000
5	10,000	90,000

The average rate of return for this investment is

		18%
		21%
		53%
		10%

Using the following partial table of present value of $1 at compound interest, the present value of $15,000 to be received 3 years hence with earnings at the rate of 6% a year is

Year	6%	10%	12%
1	0.943	0.909	0.893
2	0.890	0.826	0.797
3	0.840	0.751	0.712
4	0.792	0.683	0.636

$12,600

$11,880

$13,350

$11,265

Below is a table for the present value of an annuity of $1 at compound interest.

Year	6%	10%	12%
1	0.943	0.909	0.893
2	1.833	1.736	1.690
3	2.673	2.487	2.402
4	3.465	3.170	3.037
5	4.212	3.791	3.605

Using the tables above, what would be the present value of $25,000 (rounded to the nearest dollar) to be received 4 years from today, assuming an earnings rate of 10%?

		$19,800
		$17,075
		$79,250
		$15,525