Swiss imports can acquire a $700,000 machine now that will benefit the firm over the next 5 years. A newly hired staff assistant correctly computed the net present value to be $134,020 by using a 10% hurdle rate.FV of 1 (i=10%, n=5):1.611FV of a series of $1 cash flows (i=10%, n=5):6.105 PV of $1 (i=10%; n = 5): 0.621PV of a series of $1 cash flows (i=10%, n=5):3.791 On the basis of this information, the machine was expected to produce annual cash operating savings of approximately:
A. $834,020.
B. $166,804.
C. $268,605.
D. $220,000.
E. None of the answers is correct.
Answer: D
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