Use This Information to Answer the Following Question

Multiple Choice

Use this information to answer the following question. You have the opportunity to purchase a machine for $10,000.After careful study of expected costs and revenues,you estimate that the machine will produce a net cash flow of $3,200 annually and will last 5 years.Based on an interest rate of 7 percent,determine the present value of the machine and if the machine should be purchased.

A) $13,120,the machine should not be purchased
B) $13,120,the machine should be purchased
C) $2,282,the machine should not be purchased
D) $7,130,the machine should not be purchased