Keira Knightley Company buys a piece of equipment for $36,442 that will last for 7 years. The equipment will generate cash flows of $7,000 per year and will have no salvage value at the end of its life. Ignore taxes unless told to include them.
What is the net present value using a 12% cost of capital?
A $2,681
B $4,495
C ($2,681)
D ($4,495)