Sunderland Wood Creations
Sunderland Wood Creations Is Considering a Proposal $\begin{array}{ll}\text { Existing } & \text { Computer-operated } \\\underline{\text { lathe }} &\underline{\text { lathe }}\end{array}$

Sunderland Wood Creations
Sunderland Wood Creations is considering a proposal to sell an existing lathe and purchase a new computer-operated lathe.Information on the existing lathe and the computer-operated lathe follow:
                                                                    $\begin{array}{ll}\text { Existing } & \text { Computer-operated } \\\underline{\text { lathe }} &\underline{\text { lathe }}\end{array}$
$\begin{array}{lcc}\text { Cost } & \$ 100,000 & \$ 300,000 \\\text { Accumulated depreciation } & 60,000 & 0 \\\text { Salvage value now } & 20,000 & \\\text { Salvage value in 4 years } & 0 & 60,000 \\\text { Annual depreciation } & 10,000 & 75,000 \\\text { Anmual cash operating costs } & 200,000 &50,000\\\text { Remaining usefull life } & 4 \text { years }& 4 \text { years }\end{array}$



Refer to Sunderland Wood Creations.If the company uses 10 percent as its discount rate,what is the net present value of the proposed new lathe purchase? Present value tables or a financial calculator are required.

A) $236,465
B) $256,465
C) $195,485
D) $30,422