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Question
| Periods | Present Value Present Value of an of 1 at 8% Annuity of 1 at 8% | |
| 1.................... | 0.9259 | 0.9259 |
| 2.................... | 0.8573 | 1.7833 |
| 3.................... | 0.7938 | 2.5771 |
| 4.................... | 0.7350 | 3.3121 |
Norman Co. wants to purchase a machine for $40,000, but needs to earn an 8% return. The expected year-end net cash flows are $12,000 in each of the first three years, and $16,000 in the fourth year. What is the machine's net present value (round to the nearest whole dollar)?
A. $(9,075).
B. $2,685.
C. $42,685.
D. $(28,240).
E. $52,000.
Answer
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