Hammer Corporation wants to purchase a new machine for $290,000. Management predicts that the machine will produce sales

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Hammer Corporation wants to purchase a new machine for $290,000.
Management predicts that the machine will produce sales of $198,000
each year for the next 5 years. Expenses are expected to include
direct materials, direct labor, and factory overhead (excluding
depreciation) totaling $88,000 per year. The firm uses
straight-line depreciation with an assumed residual (salvage) value
of $50,000. Hammer's combined income tax rate, t, is
30%.
Management requires a minimum after-tax rate of return of 10% on
all investments. What is the estimated net present value (NPV) of
the proposed investment (rounded to the nearest hundred dollars)?
(The PV annuity factor for 10%, 5 years, is 3.791 and for 4 years
it is 3.17. The present value $1 factor for 10%, 5 years, is
0.621.) Assume that after-tax cash inflows occur at year-end.
Multiple Choice
$56,500.
$87,500.
$106,700.
$119,700.
$77,700.