Question: Sigma is thinking about purchasing a new clam digger for $12,000. The expected net cash flows resulting from the digger are $9,000 in year 1,

Sigma is thinking about purchasing a new clam digger for $12,000. The expected net cash flows resulting from the digger are $9,000 in year 1, $7,000 in year 2, and $5,000 in year 3, and $3,000 in year 4. Should Sigma purchase this digger if its cost of capital is 8%?

Yes, NPV = $32,509

Yes, NPV = $8,509

Yes, NPV = $5,509

Yes, NPV = $19,509

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