A Company Is Evaluating an Investment in a Piece of Machinery.The

Multiple Choice

A company is evaluating an investment in a piece of machinery.The machine costs £10,000 and is expected to generate cash flows of £3,000 in year 1,£4,300 in year 2 and £5,800 in year 3.The discount rate is 10% and the relevant discount factors are:
$$\begin{array} { c c } \text { Year 1 } & 0.909 \\\text { Year 2 } & 0.826 \\\text { Year 3 } & 0.751\end{array}$$
Calculate the NPV

A) £13,100
B) £10,634.60
C) £634.60
D) £0