Yalken Corporation is considering the purchase of a new machine. The cost of the machine is $250,000. The cash flows for five years are given below.
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
|
Cash flows
|
$84,790
|
$102,500
|
$70,580
|
$64,760
|
$115,700
|
The company is in the 35 percent tax bracket. Assuming that the cost of capital is 12%, calculate the net present value.
- $64,463
- $(64,452)
- $204,394
- $314,452