Consider a $12,000 machine that will reduce pretax operating costs by $3,500 per year over a 5-year period. Assume no changes in net working capital and a salvage value of zero. Further assume straight-line depreciation to zero, a marginal tax rate of 32%, and a required return of 9%. What is the NPV of the project?
$83.49
$449.05
$689.71
$827.93
$244.62