Beaver Corporation Is Investigating the Purchase of a New Threading

Multiple Choice

Beaver Corporation is investigating the purchase of a new threading machine that costs $18,000. The machine would save about $4,000 per year over the present method of threading component parts, and would have a salvage value of about $3,000 in 6 years when the machine would be replaced. The company's required rate of return is 12%. The machine's net present value is closest to:

A) $1,556
B) ($35)
C) $11,000
D) $8,000