The following present value factors are provided for use in this problem.

Periods	Present value of 1 at 10%	Present value of an 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

Cliff Co. wants to purchase a machine for $54,000, but needs to earn an 10% return. The expected year-end net cash flows are $20,000 in each of the first three years, and $24,000 in the fourth year. What is the machine's net present value (round to the nearest whole dollar)?

a. $(4,262).

b. $12,130.

c. $66,130.

d. $(37,608).

e. $84,000

A company is considering the purchase of a new machine for $58,000. Management predicts that the machine can produce sales of $17,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $7,000 per year including depreciation of $5,000 per year. The company's tax rate is 40%. What is the payback period for the new machine?

a. 3.41 years.

b. 6.44 years.

c. 5.27 years.

d. 11.60 years.

e. 32.22 years

Carmel Corporation is considering the purchase of a machine costing $54,000 with a 7-year useful life and no salvage value. Carmel uses straight-line depreciation and assumes that the annual cash inflow from the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is Carmel's average investment?

a. $27,000.

b. $30,857.

c. $54,000.

d. $8,816.

e. $7,714.