The most simple and commonly used method of determining the present value of an ordinary annuity is to multiply the incremental payout by the appropriate rate found on the present value of an ordinary annuity table.

+ Present Value of an Ordinary Annuity Table 2 - Present Value of an Ordinary Annuity of $1 at Compound Interest Period 5% 6% 7% 8% 9% 10% 11% 12% 1 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 2 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 3 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 4 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 5 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 6 5.076 4.917 4.767 4.623 4.486 4.355 4.231 4.111 7 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 8 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 9 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 10 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 11 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 12 8.863 8.384 7.943 7.536 7.161 6.814 6.492 6.194 13 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 14 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 15 10.380 9.712 9.108 8.559 8.061 7.606 7.191 6.811 16 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 17 11.274 10.477 9.763 9.122 8.544 8.022 7.549 7.120 18 11.690 10.828 10.059 9.372 8.756 8.201 7.702 7.250 19 12.085 11.158 10.336 9.604 8.950 8.365 7.839 7.366 20 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.469

The controller at Bolden has determined that the company could save $8,000 per year in engineering costs by purchasing a new machine. The new machine would last 10 years and provide the aforementioned annual monetary benefit throughout its entire life. Assuming the interest rate at which Bolden purchases this type of machinery is 8%, what is the maximum amount the company should pay for the machine? $___________