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Vextra Corporation is considering the purchase of new equipment costing $38,000.The projected annual cash inflow is $11,600, to be received at the end of each year.The machine has a useful life of 4 years and no salvage value.Vextra requires a 12% return on its investments.The present value of an annuity of $1 for different periods follows:Periods 12 Percent1 0.89292 1.69013 2.40184 3.0373What is the net present value of the machine (rounded to the nearest whole dollar)?a. $(35,233).b. $(2,767).c. $38,000.d. $(3,700).e. $5,233.

Respuesta :

Answer:

b. $(2,767).

Explanation:

The computation of the net present value is shown below:

= Present cash flows - initial investment

= ($11,600 × 3.0373) - $38,000

= $35,232.68 - $38,000

= -$2,767.32

= -$2,767

Hence, the option b is correct

We simply applied the above formula to determine the net present value

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