The management of Kunkel Company is considering the purchase of a $31,000 machine that would reduce operating costs by $8,500 per year. At the end of the machines five-year useful life, it will have zero scrap value. The companys required rate of return is 13%.

Exercise 8-2 Net Present Value Method [LO8-2] The management of Kunkel Company is considering the purchase of a $31,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine's five-year useful life, it will have zero scrap value. The company's required rate of return is 13%. Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor(s) using table Required: 1. Determine the net present value of the investment in the machine 1,105 Net present value