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Discuss what is the net present value of the machine

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Daniels Corporation is considering the purchase of new equipment costing $30,000. The projected annual after-tax net income from the equipment is $1,200, after deducting $10,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Daniels requires a 12% return on its investments. The factors for the present value of an annuity of 1 for different periods follow:

What is the net present value of the machine?

$24,018.
$(3,100).
$30,000.
$26,900.
$(29,520).

Reference no: EM131773736

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