The Stark County Executives Are Considering the Purchase of New

Multiple Choice

The Stark County executives are considering the purchase of new 130 hp bulldozer and are comparing two models: the BEHEMOTH and the GOLIATH. The BEHEMOTH bulldozer costs $130,000, with a projected annual operating and maintenance cost of $31,000 and a salvage value $15,000 after 7 years. The GOLIATH model costs $175,000, with a projected annual operating and maintenance cost of $22,000 and a salvage value of $21,000 after 7 years.
-Find the net present value of the BEHEMOTH compressor if the cash flows are discounted annually at 12%.

A) -$265,903
B) -$273,224
C) -$287,727
D) -$264,691
E) -$280,487