Daniels Corporation is considering the purchase of new equipment costing $30,000. The projected annual
after-tax net income from the equipment is $1,200, after deducting $10,000 for depreciation. The revenue
is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value.
Daniels requires a 12% return on its investments. The present value of an annuity of 1 for different
periods follows:
What is the net
present value of
the machine?
A. $24,018.
B. $ (3,100).
C. $30,000.
D. $26,900.
E. $ (29,520)
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