Find net present value of the proposed project is closest to

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Lebert, Inc. is considering the purchase of a machine that would cost $380.000 and would last for 7 years. At the end of 7 years, the machine would have a salvage value of $49.000. The machine would reduce labor and other cost $96.000 per year. Additional working capital of $6000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 18% on all investment projects.

Question 1: The net present value of the proposed project is closest to:

a) ($ 14,048)

b) $ 1,338

c) ($2,778)

d) ($8,849)

Reference no: EM132516439

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