Baker Enterprises Is Evaluating the Purchase of a New Computer

Baker Enterprises is evaluating the purchase of a new computer network system. The new system would cost $24,000 and have a useful life of 6 years. At the end of the system's life, it would have a residual value of $3,000. Annual operating cost savings from the new system would be $8,800 per year for each of the six years of its life. Baker Enterprises has a minimum required rate of return of 12% on all new projects. The net present value of the new network system would be closest to

A) $10,656.
B) $12,177.
C) $13,698.
D) $37,698.