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The management of Penfold Corporation is considering the purchase of a machine that would cost...

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Accounting

The management of Penfold Corporation is considering the purchase of a machine that would cost $380,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $85,000 per year. The company requires a minimum pretax return of 13% on all investment projects.

The net present value of the proposed project is closest to (Ignore income taxes.):

Multiple Choice

  • $(81,055)

  • $(6,055)

  • $(166,055)

  • $(379,997)

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