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Present value of machine investment

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Reference no: EM13150481

A business is considering the investment in a new machine that will cost $320,000 with no salvage value. The machine is expected to reduce labor costs by $70,000 per year and material scrap by $20,000 per year. The machine is expected to have a 5-year life. What is the present value of this investment, assuming a 12% interest rate?

A. $4,450

B. $130,000

C. $(64,850)

D. $(67,650)

Reference no: EM13150481

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