(LO 10)The following present value factors are provided for use in this problem.

 

Periods Present Value

of $1 at 12% Present Value of an

Annuity of $1 at 12% 1   0.8929     0.8929   2   0.7972     1.6901   3   0.7118     2.4018   4   0.6355     3.0373  

 

Cliff Co. wants to purchase a machine for $50,000, but needs to earn an 12% return. The expected year-end net cash flows are $18,000 in each of the first three years, and $22,000 in the fourth year. What is the machine's net present value?

Multiple Choice

• $(6,768).
• $7,213.
• $57,213.
• $(36,019).
• $76,000.