The Sawyer Corporation has $135,000 to invest and is considering two different projects, X and Y. The following data are available on the projects:

Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.

	Project X	Project Y
Cost of equipment needed now	$135,000	-
Working capital requirement	-	$135,000
Annual cash operating inflows	$39,000	$34,000
Salvage value in 5 years	$ 6,000	-

Both projects will have a useful life of 5 years; at the end of 5 years, the working capital will be released for use elsewhere. Sawyer's discount rate is 13%. The net present value of project X is closest to:

Noreen 4e Recheck 2017-22-03

a. $2,019

b. ($10,812)

c. $4,387

d. $5,421