Question 26 Chapter 24

TB MC Qu. 24-120 (Algo) Poe Company is considering the purchase of... Poe Company is considering the purchase of new equipment costing $82,500. The projected net cash flows are $37,500 for the first two years and $32,500 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 an annuity of $1 and present value of an annuity of $1 for different periods is presented below. Compute the net present value of the machine (rounded to the nearest whole dollar). Multiple Choice $(21,156). $(9,423). $21,156. $9,423. $29,199