Tyson Enterprises Is Considering Investing in a Machine That Costs

Tyson Enterprises is considering investing in a machine that costs $30 000.The machine is expected to generate revenues of $10 000 per year for six years.The machine would be depreciated using the straight-line method over its six-year life and have no salvage value.The company considers the impact of income taxes in all of its capital investment decisions.The company has a 40 per cent income tax rate and desires an after-tax rate of return of 12 per cent on its investment.The net present value of the machine is:

A) $ 2891
B) $ (5332)
C) $(13 555)
D) $ 15 225

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