Western Electronics (WE) Is Reviewing the Following Data Relating to a New

Multiple Choice

Western Electronics (WE) is reviewing the following data relating to a new equipment proposal: $\begin{array}{|l|c|}\hline \text { Net initial investment } & \$ 50,000 \\\hline \text { After-tax cash inflow from disposal of the investment after } 5 \text { years } & \$ 10,000 \\\hline \text { Present value of an annuity of } \$ 1 \text { at } 12 \% \text { for } 5 \text { years } & 3.605 \\\hline \text { Present value of } \$ 1 \text { at } 12 \% \text { in } 5 \text { years } & 0.567 \\\hline\end{array}$ WE expects the net after-tax savings in cash outflows from the investment to be equal in each of the 5 years.What is the minimum amount of after-tax annual savings (including depreciation effects) needed to make the investment yield a 12% return (rounded to the nearest whole dollar) ?

A) $8,189.
B) $11,111.
C) $12,297.
D) $13,889.
E) $15,678.