Regina Corporation Estimates That It Can Save $6 500 a Year

Multiple Choice

Regina Corporation estimates that it can save $6 500 a year in cash operating costs for the next eight years if it buys a special purpose machine at a cost of $32 000. No residual value is expected. The firm's minimum desired rate of return is 9%. Compute the net present value (to the nearest whole dollar) .

A) $3 976
B) $624
C) $7 631
D) $20 000