Boston Company is contemplating the purchase of a new machine on which the following information has been gathered:
- Cost of the machine $38,900
- Annual cash inflows expected $10,000
- Salvage value $ 5,000
- Life of the machine 6 years
The company's discount rate is 16%, and the machine will be depreciated using the straight-line method. Given these data, the machine has a net present value of:
a. -$26,100.
b. -$23,900.
c. $0.
d. +$26,100.