Superior Printing is considering a capital investment for a new printing press with a ten-year life. Superiors cost of capital is 10%. Relevant cash flows and related present value factors are as follows:

Investment in printing press = $240,000. Investment in working capital items = $10,000 Annual net cash inflow from operating the press = $40,000. Salvage value of the press = $18,000. Present value of $1 (10 Years @ 10%) = 0.3855 Present value of an annuity of $1 (10 Years @ 10%) = 6.1446

The present value of the annual net cash inflows from operating the press is:

• $15,420.

• $245,784.

• $40,000.

• $5,378.