The Coleman Co. produces canned tomatoes and it is considering the purchase of a new machine that would increase the speed of the canning process and save money. The cost of this machine is $40,000. The annual cash flows are projected to be the following:

Year Cash Flow

1 $5,000

2 $10,000

3 $25,000

4 $15,000

5 $20,000

What is the net present value of selecting the new machine, assuming an interest rate of 8%?

A. $17,686

B. $97,686

C. $57,686

D. $7,868