Woods Manufacturing Is Considering the Purchase of a New Sewing

Multiple Choice

Woods Manufacturing is considering the purchase of a new sewing machine that costs $16,000.The machine, because of its efficiency, will save about $4,000 in cost each year.The machine is expected to have a salvage value of $3,000 and a life of 6 years.Woods' required rate of return is 12%.Using the interest tables, what is the machine's net present value?

A) ($34)
B) $1,966
C) $15,000
D) $24,000