Bing and Associates Inc

Bing and Associates Inc., which uses net present value to analyze investments, requires an 8% minimum rate of return. One of their entry level associates recently calculated a $200,000 machine's net present value to be $34,560, excluding the impact of straight-line depreciation. If Bing and Associates ignores income taxes and the machine is expected to have a four-year service life, the correct net present value of the machine would be:

A) $34,400
B) $34,560.
C) $163,250.
D) $200,000.
E) $365,600.

Correct Answer:

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