(Ignore Income Taxes in This Problem

(Ignore income taxes in this problem.) Lebert, Inc., is considering the purchase of a machine that would cost $380,000 and would last for 7 years. At the end of 7 years, the machine would have a salvage value of $49,000. The machine would reduce labor and other costs by $96,000 per year. Additional working capital of $6,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 18% on all investment projects
-The net present value of the proposed project is closest to:

A) $1,338
B) $(8,849)
C) $(14,048)
D) $(2,778)

Correct Answer:

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