TB MC Qu. 24-112 (Algo) A company is considering...

A company is considering the purchase of new equipment for $60,000. The projected annual net cash flows are $24,500. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 10% return on investment. The present value of an annuity of $1 for various periods follows:

Period	Present value of an annuity of $1 at 10%
1	0.9091
2	1.7355
3	2.4869

What is the net present value of this machine (rounded to the nearest whole dollar) assuming all cash flows occur at year-end?

Multiple Choice

• $20,000

• $3,500

• $929

• $23,500

• $58,442