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What would be the net present value

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Point 1: Michaels, Inc., purchased a machine for $75,000. The machine has a useful life of five years and no salvage value. Straight-line depreciation is to be used. The machine is expected to generate cash flow from operations, net of income taxes, of $30,000 in each of the five years. Michaels' expected rate of return is 10%. Information on present value factors is as follows:

PeriodPresent value of $1 at 10%Present value of ordinary annuity of $1 at 10%

10.909090.909092

0.826451.735543

0.751322.486854

0.683013.169865

0.620923.79079

Question 1: What would be the net present value?

Select one:

a. $113,724

b. $38,724

c. $284,318

d. $93,138

Reference no: EM132492575

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