1. The Mountain Jam Company purchased a machine 5 years ago for $70,000. It has an estimated life of 7 years from the time of purchase and is expected to have zero salvage value at the end of 7th year. The old machine can be sold today for $60,000. A new machine can be purchased for $69,300. It has a 2-year life and is expected to reduce operating expenses by $50,000 per year. Sales aren't expected to change. After 2 years, the new machine can be sold for $20,000. The company uses the straight-line method to calculate depreciation for both machines. The tax rate is 40%. What is the NPV for the proposed acquisition if the cost of capital is 13%?

$27,319

$49,742

$50,588

$53,605

$61,016

2. What is the present value of $12,480 to be received at the end of year 2, while during the first year, the interest rate is 20% for the year and during the second year, interest rate is 4% for the year?  

10,700

11,900

$10,300

$10,000

$12,000