Poe Company is considering the purchase of new equipment costing $88,000. The projected net cash flows are $43,000 for the first two years and $38,000 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine.

Periods	Present Value of 1 at 10%	Present Value of an Annuity of 1 at 10%
1	0.9091	0.9091
2	0.8264	1.7355
3	0.7513	2.4869
4	0.6830	3.1699

$(33,090).

$(19,384).

$33,090.

$19,384.

$41,134.

A company can buy a machine that is expected to have a three-year life and a $23,000 salvage value. The machine will cost $1,772,000 and is expected to produce a $193,000 after-tax net income to be received at the end of each year. If a table of present values of 1 at 12% shows values of 0.8929 for one year, 0.7972 for two years, and 0.7118 for three years, what is the net present value of the cash flows from the investment, discounted at 12%?

$108,245

$568,728

$618,627

$692,890

$1,880,245

A company is considering the purchase of new equipment for $78,000. The projected annual net cash flows are $31,100. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 11% return on investment. The present value of an annuity of 1 for various periods follows:

Periods	Present value of an annuity of 1 at 11%
1	0.9009
2	1.7125
3	2.4437

What is the net present value of this machine assuming all cash flows occur at year-end?

$26,000

$4,100

$(2,001)

$30,100

$73,555

Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investment of $14,400 and will produce cash flows as follows:

End of Year	Investment
	A	B
1	$9,600	$0
2	9,600	0
3	9,600	28,800

The present value factors of $1 each year at 15% are:

1	0.8696
2	0.7561
3	0.6575

The present value of an annuity of $1 for 3 years at 15% is 2.2832

The net present value of Investment B is:

$4,536.

$(18,936).

$14,400.

$7,519.