The management of Urbine Corporation is considering the purchase of a machine that would cost $390,000 would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $74,000 per year. The company requires a minimum pretax return of 12% on all investment projects. (Ignore income taxes in this problem.)

Click here to view Exhibit 11B-1 (http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-1.JPG) and Exhibit 11B-2 (http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-2.JPG), to determine the appropriate discount factor(s) using tables.

The net present value of the proposed project is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

$2,264

$74,864

$52,264

$29,664

Comment