Kafka, Inc., estimates that it can generate $4,600 per year in additional cash inflows for the next five years if it modernizes its equipment at a cost of $15,000. The company’s minimum desired rate of return is 10%. Using the present value factors in your text (Tables 6-4 and 6-5), the net present value of the project is (rounded)
a. $(12,562).
b. $(2,438).
c. $2,438.
d. $8,000.
e. $23,000.
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