A machine that costs $1,500,000 has a 3-year life. It will generate after-tax annual cash flows of

$700,000 at the end of each year. It will be salvaged for $200,000 at the end of year 3.

If your
required rate of return for the project is 13%, what is the NPV of this investment?
A) $400,000 B) $291,417 C) $600,000 D) $338,395
82)
Initial Outlay
Cash Flow in
Period 1
Cash Flow in
Period 2
Cash Flow in
Period 3
Cash Flow in
Period 4
$4,000,000 $1,546,170 $1,546,170 $1,546,170 $1,546,170
The Internal Rate of Return (to nearest whole percent) is
A) 20%. B) 10%. C) 18%. D) 24%.

B