A company wished to reduce costs on a product it manufactures. The company is considered a capital expenditure of $80,000, which would generate an annual net cash flow of $30,000 beginning in year one. Marketing has determined the product will be sold for three years after the new equipment is installed. The company expects an annual discount rate of 8%
a. $9,200
b. $3,600
c. $10,000
d. $2,688