Exercise 11-2 Net Present Value Method [LO11-2] The management of Kunkel Company is considering the purchase of a S20,000 machine that would reduce operating costs by $5,000 per year At the end of the machine's five-year useful life, it will have zero scrap value The company's required rate of return is 13% Click here to view Exhibit 118-1 and Exhibit 118-2. to delermine the appropriate discount factor(s) using tables Required: 1. Determine the net present value of the investment in the machine 2 What is the difference behween the total, undiscounted cash inflows and cash outfows over the entire ife of the machine? (Any cash outflows should be indicated by a minus sign.) Item Cash Flow Years Total Cash Flows Annual cost savings Initial investment Net cash flow 0 References Expanded table Exercise 11-2 Net Present Value Mathod 011