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What is the approximate net present value of this investment

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Question - An agricultural accounting firm is considering purchasing several new copy machines. A $20,000 down payment would be required. Amortized loan payments of $12,000 would then be made at the end of years 1-5. The copiers would have a salvage value of $4,000 at the end of five years. Annual operating expenses would be $3,000 each year. $18,000 in cash inflows each year would be attributed to the copiers. Given a cost of capital of 5%, what is the approximate net present value of this investment?

a. $3,877

b. Cannot be determined

c. -$3,877

d. $4,329

Reference no: EM132571540

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