Find what the net present value of the machine is

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Problem 1: A manufacturer is considering the purchase of a new processing machine. The initial cost of the machine will be $300 000. The expected increase in net cash inflow as a result of the purchase is $75 000 for the first year and $160 000 for each of the next two years. The machine will have a salvage value of zero. At a discount rate of 5%, the net present value of the machine is:

Option 1: $54 758.
Option 2: $41 201.
Option 3: $68 934.
Option 4: $354 758.

Reference no: EM132727628

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