Poe Company is considering the purchase of new equipment costing $81,500. The projected net cash flows are $36,500 for the first two years and $31,500 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 $1 and present value of an annuity of $1 for different periods is presented below. Compute the net present value of the machine.

Present Value Present Value of an

Periods of $1 at 10% 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