The following present value factors are provided for use in this problem.
|
Periods
|
Present Valueof $1 at 8%
|
Present Value of anAnnuity of $1 at 8%
|
|
1
|
0.9259
|
0.9259
|
|
2
|
0.8573
|
1.7833
|
|
3
|
0.7938
|
2.5771
|
|
4
|
0.7350
|
3.3121
|
Xavier Co. wants to purchase a machine for $36,800 with a four year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $11,800 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)?
$3,018.
$2,283.
$39,818.
$(3,018).
$(2,283).