(Ignore income taxes in this problem.) The management of Mashiah Corporation is considering the purchase of a machine that would cost $360,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $116,000 per year. The company requires a minimum pretax return of 9% on all investment projects.

Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.

The net present value of the proposed project is closest to:

$128,107

$392,000

$91,240

$218,690