The management of Penfold Corporation is considering the purchase of a machine that would cost $310,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $74,000 per year. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to (Ignore income taxes.):

NPV = $-43246.56103 rounded off to - $43246.56

Explanation:

The Net Present Value or NPV is a tool used to evaluate projects. It is used with various other tools to decide whether to undertake a project or not. To calculate the Net Present Value or NPV, we take the present value of the cash inflows provided by the project and deduct the initial cost of the project.

NPV = CF1 / (1+r)  +  CF2 / (1+r)^2  +  ...  + CFn / (1+r)^n  -  Initial Cost

Where,

NPV = 74000 (1+0.12)  +  74000 (1+0.12)^2  +  74000 (1+0.12)^3  +  74000 (1+0.12)^4  +  74000 (1+0.12)^5  -  310000

NPV = $-43246.56103 rounded off to - $43246.56

answer; tech (a) is correct;

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

                                          hope it