Zinc Corp Is Planning to Purchase New Machinery

Multiple Choice

Zinc Corp is planning to purchase new machinery. The initial cash outlay is expected to be $40,000 and the expected return on investment is 9%. The cash flows for the next 3 years are $9,800, $11,720 and $9,640. Based on net present value (NPV) analysis, Zinc Corp should:

A) accept the project as the NPV is $14,500.
B) reject the project as the NPV is $(13,700.84) .
C) accept the project as the NPV is (28,900.25) .
D) reject the project as the NPV is 40,500.
E) accept the project as the NPV is $56.225.