Vandezande Inc. is considering the acquisition of a new machine that costs $370,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are (Ignore income taxes.): Incremental Net Operating IncomeIncremental Net Cash FlowsYear 1$54,000 $128,000 Year 2$31,000 $105,000 Year 3$52,000 $126,000 Year 4$49,000 $123,000 Year 5$48,000 $122,000 Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Assume cash flows occur uniformly throughout a year except for the initial investment.If the discount rate is 10%, the net present value of the investment is closest to:
A. $370,000
B. $87,479
C. $457,479
D. $234,000
Answer: B
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