A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100.

A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
a.     $490
b.     $570
c.     $900
d.     -$150

Solution