Benaflek Co A)$40,956
B)$36,632

Benaflek Co. purchased some equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(1,800) . Annual cost savings were: $20,000 for year 1; $16,000 for year 2; and $12,000 for year 3. The amount of the initial investment was $\begin{array}{llr}& \text { Present Value } & \text { PV of an Annuity } \\\text { Year } & \text { of } 1 \text { at } 12 \% & \text { of } 1 \text { at } 12 \% \\1 & .893 & .893 \\2 & .797 & 1.690 \\3 & .712 & 2.402\end{array}$

A) $40,956.
B) $36,632.
C) $40,232.
D) $37,356.